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Independence lawyer tied to utility projects that drew FBI scrutiny indicted for tax evasion

By: - December 22, 2022 6:30 am

Federal law enforcement has been looking into utility contracts in Independence since 2019 (photo courtesy of the City of Independence).

An attorney and former elected official in Independence was indicted Tuesday by a federal grand jury on felonies related to tax evasion. 

John C. Carnes, 67, was charged with one count of tax evasion, one count of corruptly endeavoring to obstruct the IRS and seven counts of failure to pay taxes. He appeared in the Western District of Missouri Kansas City Wednesday and was released on bond.

Carnes is a former member of the Jackson County Legislature and Independence City Council who served two years in prison after being convicted in 1989 of bank fraud and bribing another council member. His law license was reinstated in 2006. 

More recently, Carnes was involved in two Independence utility projects that have faced years of FBI scrutiny — the city’s decision to purchase the former Rockwood Golf Course to build a solar farm and the contract to demolish the city-owned power plant in Missouri City.

According to the indictment, Carnes allegedly avoided paying taxes between 2012 and 2018 and attempted to hide his tax liability by shifting money into attorney trust accounts, which are supposed to be for funds that are in a lawyer’s possession in connection with representing a client. He allegedly owes nearly $345,000 in back taxes

Federal prosecutors say Carnes deposited $232,000 into attorney trust accounts that came from fees for services related to the sale of the Rockwood Golf Course and the demolition of the Missouri City Power Plant.

The attorney trust accounts were used, the indictment alleges, to prevent the IRS from collecting money Carnes owed on income taxes.

Carnes is also alleged to have withdrawn cash from attorney trust accounts to fund his personal and business expenses, including at Kansas City-area casinos. He also received cash from clients that he did not deposit into his bank accounts.

In an interview Wednesday with the Kansas City Star, Carnes said he’s always represented his clients “within ethical boundaries.”

Utility contracts

In 2019, the FBI began questioning local officials in Independence about a pair of utility contracts issued by the city council in 2017.

One contract called for the city to pay a St. Louis company $9.75 million to tear down a power plant that Independence Power and Light was no longer using in Missouri City. 

The bid was more than twice that of the other bidder, and the owner of the company that won it had longstanding ties to the lobbyist for Independence Power & Light, former Missouri House Speaker Steve Tilley. 

The other contract called for the city to pay nearly $1 million to purchase the former Rockwood Golf Club in order to build a solar farm in a joint venture with Gardner Capital, a Springfield private equity firm. 

Gardner Capital is also a Tilley client, and just days before the vote to purchase the property political action committees connected to Tilley and funded Gardner made four $2,500 donations to Independence Mayor Eileen Weir. 

She vehemently denied the donations were connected to her vote to endorse the project. 

Tilley would later serve as the lobbyist for Titan Fish, a real estate company that sold the golf course to the city for close to twice what it had paid for it just months before. The FBI interviewed Titan Fish’s owner in the summer of 2021 about the utility contracts and medical marijuana licensing

According to the Missouri Ethics Commission, as of Sept. 1 Tilley’s lobbying firm is no longer registered to lobby on behalf of Independence Power & Light. A spokeswoman for the firm said its contract with the city expired. 

Weir briefly ran for re-election earlier this year but dropped out of the race after she barely advanced to the general election. She was replaced by former state Rep. Rory Rowland.

Independence received a pair of grand jury subpoenas in early 2020 seeking records of non-public meetings of the Independence City Council receipts submitted by four members of the Independence City Council for reimbursement.

One of the meetings in question was with Carnes.

The head of Missouri’s medical marijuana program testified under oath in late 2020 that a grand jury subpoena his agency received was likely connected to an FBI investigation in Independence.

There have been no indictments regarding either contract.

This story has been updated. 

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Jason Hancock
Jason Hancock

Jason Hancock has spent two decades covering politics and policy for news organizations across the Midwest, with most of that time focused on the Missouri statehouse as a reporter for The Kansas City Star. A three-time National Headliner Award winner, he helped launch The Missouri Independent in October 2020.