MADISON COUNTY — County officials are seeking customer information on 25,000 Madison County residents from Entergy Mississippi in an ongoing investigation of homestead exemption fraud, but the utility is fighting what it calls “a fishing expedition” in a case before the Mississippi Supreme Court.
“The only thing we’re asking from Entergy are regularly kept business records,” said Madison County District Attorney Michael Guest, who is representing the county tax assessor’s office, which is seeking a grand jury subpoena for the information. “This seeks nothing more than the address and name where the services are provided.”
Madison County wants information on all Entergy customers in the Madison and Canton ZIP codes because that is the tracking method used by the company, Guest said.
Tax Assessor Gerald Barber said the information is needed for an ongoing fraud investigation into homeowners who rent their properties but still claim homestead exemption, which reduces the taxes paid to the county.
“If they’re not evading taxes, they have nothing to worry about,” he said.
However, a government using business records to investigate citizens is drawing a parallel to the recent headlines that the National Security Agency has a court order to get Verizon’s phone records of millions of Americans.
Mississippi College law professor Matt Steffey said comparisons can be drawn from the national case to the local one but on a smaller scale. The NSA’s court order and the county’s request for a subpoena are both tools for getting business records of private companies.
“It rarely makes anybody happy to know that the government is getting phone records or electric records,” he said. “What’s next? We live in an age where people are understandably concerned with the increased scope of government in their private lives.”
Lake Caroline resident Greg Regan said he doesn’t want Entergy giving out his name and address because of the potential for the information to be misused. Lake Caroline and two other subdivisions, Deerfield and Ashbrooke, were the neighborhoods specifically included in the first subpoena sought by the tax assessor’s office. A second subpoena later expanded the information request for all residential customers in the 29110 and 39046 ZIP codes.
“I don’t believe in big government. If you have the data, you have an opportunity for abuse,” he said.
Regan said the Madison County case sounds similar to the Verizon case.
“If the opportunity is there, somebody will use it, and I think this local issue is the same thing. Involving another company is totally wrong.”
Last September, Madison County Circuit Judge John Emfinger denied Entergy’s request to quash the grand jury subpoena, which sought to open the business records. Entergy then appealed to the Mississippi Supreme Court. Both sides filed the last of the court briefs on May 31 and are now awaiting the court’s ruling.
“Entergy is very protective of our customers’ information that they’ve entrusted us with and we believe, as spelled out in the briefs we filed with the court, that the U.S. Supreme Court has already spoken out against the sharing of this information in other cases similar to ours,” Entergy Mississippi spokesman Mara Hartmann said.
In court documents, Entergy attorney Linda Cooper said the county is not targeting special individuals but all customers in the area to see who may owe taxes.
The county’s subpoena request is “an impermissible fishing expedition that seeks confidential (Entergy) data for general inquiry purposes that are not based on probable cause as to a crime that may have been committed by any particular identifiable person or group of persons.”
Steffey agreed with the company’s assertion because “the county doesn’t have a specific idea of who is committing homestead fraud. This is a fishing expedition in the sense that what the county hopes to find is evidence that leads to other evidence that might confirm the fraud.
“But, because it’s a fishing expedition doesn’t suggest that it’s evil,” Steffey said. “This is using the broad powers that the grand jury has to help them investigate.”
Barber said his office wants to double check if the utility bills are addressed to the name on the property deed, particularly in the unincorporated areas of the county since the cities do a good job of keeping current on rental properties. To claim homestead exemption, the property owner must live in the house as his primary residence.
“We have reason to believe some particular subdivisions have higher rental rates,” he said.
Different names on the bills and the deeds “doesn’t instantly make you guilty,” Barber said. The office knows that a parent could be paying the bills for children or children for their parents, he said.
“This just gives us a reason that there may be fraud,” he said.
Using the Entergy names would a starting point, Barber said, for his office to see if further investigation is needed.
“Usually something as simple as a phone call or a drive by will clear it up,” he said.
Barber said his office has recovered about $225,000 in its fraud investigation in the last 12 months.
“That’s stopping a perpetual crime because that’s another quarter of a million dollars that returns to the county each year.”
Guest said the request for information from Entergy is limited to residential addresses, and the county is seeking to work with the utility in the least invasive way.
“We understand Entergy’s position that theirs are private business records, but we’re looking at possible criminal charges,” Guest said. “We’re trying to work with the tax assessor’s office to make sure that citizens are not being cheated by those who want to defraud the county out of tax dollars.”