Benjamin Franklin once said that the only things certain in life are death and taxes. He forgot to add one more certainty – if caught stealing money from the U.S. government, a prison sentence is sure to follow. Today’s ”Fraud of the Day,” from the Las Vegas Review-Journal, details the story of three men who were involved in a massive tax fraud scheme that bilked the Internal Revenue Service (IRS) of an estimated $324 million.

The three defendants include the former general manager, chairman and marketing guru for an organization that sold an Internet service allowing customers to claim income tax credits and tax deductions under the Americans with Disabilities Act. The story reports that even though the company’s team of tax experts advised that the IRS would not approve of the program, they continued to market it after an investigation was opened. (Not too bright.) Many customers who bought the package were audited by the IRS and questioned as to the legality of the program. (In addition to the government, thousands of clients across the country were victimized by the scheme.)

The story goes on to say that the co-founder of the company who produced the program died approximately 10 years ago. The businessman who actually created the product previously pleaded guilty in exchange for a lighter sentence. He actually testified for the government at the three defendants’ trial, which lasted for six weeks.

The three fraudsters were found guilty by jury for the scam which happened over a three year period of time. The general manager, who was a former casino owner and the chairman of the company were both found guilty of 20 felony charges including conspiracy to defraud the IRS and assisting with the preparation of false tax returns. The former marketing executive, who was previously a former NFL player, was found guilty on 18 felony charges including conspiracy.

The article states that a sentencing date has been scheduled. (My guess is that they will be going to prison for a very long time.) Even though the defendants will most likely appeal the verdict, it is a certainty that the government will continue to fight these criminals and any others who try to victimize taxpayers and steal from the U.S. Treasury.

Source: Today’s ”Fraud of the Day” is based on an article titled, ” 3 Found Guilty in Las Vegas-based Federal Tax Fraud Case,” written by Jeff German and published by the Las Vegas Review-Journal on May 27, 2014.

Following a six-week trial, a federal jury convicted three men Tuesday in a massive tax fraud scheme that occurred more than a decade ago.

The scheme, which federal prosecutors said occurred between 2001 and 2004, involved the now-defunct Las Vegas company the National Audit Defense Network. The company was accused of selling an Internet package, dubbed ”Tax Break 2000,” to help thousands of clients across the country claim improper tax deductions.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.