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Dec. 2, 2024 |  By: Jason Hancock - Missouri Independent

Independence lawyer tied to utility contracts that drew FBI scrutiny pleads guilty to tax evasion

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By Jason Hancock - Missouri Independent

An attorney and former elected official in Independence connected to two Independence utility projects that faced years of FBI scrutiny pleaded guilty Monday to federal tax evasion. 

John C. Carnes, 69, was indicted by a federal grand jury in 2022 and charged with one count of tax evasion, one count of corruptly endeavoring to obstruct the IRS and seven counts of failure to pay taxes.

A former member of the Jackson County Legislature and Independence City Council, Carnes 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. 

Carnes’ indictment highlighted his involvement in the decision by the Independence City Council to purchase the former Rockwood Golf Course to build a solar farm and to sign a contract to demolish the city-owned power plant in Missouri City, both in 2017.

In pleading guilty, Carnes admitted he “willfully attempted to evade paying his personal income taxes” from 2012 to 2018, according to the U.S. Attorney’s Office of the Western District of Missouri. 

Carnes used attorney trust accounts — which are supposed to be for funds that are in a lawyer’s possession in connection with representing a client — to prevent the IRS from collecting money he owed on income taxes.

The scheme included depositing $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. 

Carnes also withdrew cash from attorney trust accounts to fund his personal and business expenses, including at Kansas City-area casinos. He withdrew $144,000 from one account from 2013 to 2015 and $444,000 from another from 2016 to 2019, the U.S. Attorney’s Office said.

All told, Carnes failed to pay more than $800,000 in taxes.

Under federal statutes, Carnes is subject to a sentence of up to five years in prison without parole. A sentencing hearing is yet to be set in the case.

 

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 at the time 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 was also a Tilley client, and just days before the vote to purchase the property political action committees connected to Tilley and funded by Gardner made four $2,500 donations to then-Independence Mayor Eileen Weir. 

Weir 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. 

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

There have been no indictments regarding either of the utility contracts.

Earlier this year, Carnes told the Kansas City Star that his indictment was payback by federal officials who were upset that their Independence investigation fizzled.