June 30, 10

NEWS / Phoenix Attorney and Two Accountants Plead Guilty to Participation in Fraudulent Offshore Tax Shelte

Attorney Steven W. Allen pleaded guilty in federal court in Arizona to taking part in a conspiracy to defraud the Internal Revenue Service (IRS) by promoting a fraudulent offshore trust scheme to hide his clients’ income, the Justice Department and IRS announced today. Allen P. Goodmansen, a certified public accountant, pleaded guilty to participating in the same conspiracy. Charles D. Kober, an accountant, pleaded guilty to aiding and assisting in the preparation of a false tax return for a client who used the trust scheme.

According to the indictment and the plea agreements, from at least 1997 to 2004, Allen, Goodmansen and others, participated in a scheme to help their clients evade their income taxes. Allen set up a series of offshore trusts in which his clients hid their income from the IRS. Allen also helped his clients hide their ownership of businesses and other assets by directing them to title their businesses and other assets in the names of their foreign trusts. Allen charged his clients between $10,000 and $30,000 to set up the trust packages.

The indictment and plea agreements further state that, at Allen’s direction, accountants Goodmansen and Kober prepared false trust tax returns to create the appearance that their clients’ income belonged to their trusts. Goodmansen and Kober also prepared fraudulent personal tax returns for some of their clients. These fraudulent tax returns omitted the income that the clients hid through the foreign trusts. To hide the fact that the scheme was taking place in Arizona, Allen caused the false trust tax returns to be mailed to the IRS from outside the United States. In fact, none of the clients’ money or other assets were outside of the United States. Goodmansen also personally used the scheme in 2002 to hide his own income from the IRS.

Allen and Goodmansen face a maximum sentence of five years in prison and a fine of $250,000. Kober faces a maximum sentence of three years in prison and a fine of $250,000. Allen will be sentenced on Sept. 20, 2010, and Goodmansen and Kober will be sentenced on Sept. 13, 2010.

This case was investigated by IRS Criminal Investigation in Phoenix, and is being prosecuted by Tax Division Trial Attorneys Monica B. Edelstein and Michael J. Romano.

http://www.justice.gov/opa/pr/2010/June/10-tax-763.html

Tags: criminal investigation,