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Thursday, June 24, 2004

Employers keep getting sucked into de-tax schemes, and they keep going to jail. This employer got 15 months for failing to withhold. No employer has ever beaten the IRS on these theories, though they continue to be shamelessly espoused by Bob Schulz's We-The-People scam.



June 14, 2004

PRESS RELEASE
FORMER FRANKLIN BUSINESSMAN SENTENCED FOR TAX OFFENSES

Boston, MA... A former Franklin business owner was sentenced in federal court today in connection with tax offenses involving his failure to account for and pay over to the Internal Revenue Service more than $175,000 in federal income, social security and medicare taxes that he withheld from the paychecks of his employees during the years 1997 to 1999. He was also sentenced for having failed to file individual income tax returns despite earning more than $500,000 in gross income over the same time period.

United States Attorney Michael J. Sullivan and Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation, announced that MICHAEL SCHLEVENICK, age 51, formerly of 1 Franklin Springs Road in Franklin, Massachusetts, was sentenced by U.S. District Judge Douglas P. Woodlock to 1 year and 3 months in prison, to be followed by 2 years of supervised release.

SCHLEVENICK pleaded guilty on March 10, 2004 to a fourteen-count Indictment charging him with failure to account for, and pay, withholding taxes, and failure to file individual returns.

At the earlier plea hearing, the prosecutor told the Court that, had the case proceeded to trial, the evidence would have proven that SCHLEVENICK owned a Franklin-based business named Coastal Marketing, Inc. ("Coastal"). SCHLEVENICK prepared and issued paychecks to Coastal's employees from which he deducted state and federal income taxes and social security and medicare taxes. During the years 1997, 1998 and 1999, SCHLEVENICK withheld more than $175,000 in federal taxes from his employees' paychecks, yet willfully failed to report or pay over those taxes to the IRS.

As stated at the plea hearing, the evidence further would have shown that over the same time period, SCHLEVENICK personally received more than $500,000 in gross income, but did not timely report or pay taxes on any of it.

The case was investigated by the U.S. Internal Revenue Service, Criminal Investigation and was prosecuted by Assistant U.S. Attorney Michael J. Pineault in Sullivan's Economic Crimes Unit.

Press Contact: Samantha Martin, (617) 748-3139

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Get the TRUTH about Paytriots and Tax Protestor Scams at http://quatloos.com

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Another day, another bad day for tax protestors, this time for Stephen Swan, an Irwin Schiff acolyte from New Hampshire who was sentenced to federal prison for 9 years for drinking Irwin's koolaid. Will Schiff still claim that his methods of foolproof? Of course, since to claim otherwise would kill his book and kit sales. Even Swan figured out that Schiff was just a scam artist, but too late to do himself any good.


MEDIA RELEASE Contact: Thomas P. Colantuono

For Immediate Release United States Attorney

June 24, 2004 William E. Morse

Assistant U.S. Attorney

James W. Chapman, Jr.

Trial Attorney, Tax Division

U.S. Department of Justice

(603) 225-1552





TAX RETURN PREPARER SENTENCED TO NINE YEARS

FOR PREPARING FALSE RETURNS





CONCORD, NEW HAMPSHIRE - The United States Attorney for the District of New Hampshire, Tom Colantuono, and Eileen J. O'Connor, Assistant Attorney General, Tax Division, U.S. Department of Justice announced that today Steven A. Swan, fifty-one, of Manchester, New Hampshire, was sentenced to 9 years in federal prison for a variety of tax offenses related to his tax return preparation business.



On February 12, 2004, after a six day jury trial, Swan was convicted of fifteen counts of preparing false tax returns and amended returns for others, two counts of preparing false amended tax returns for himself and one count of corruptly impeding the administration of the federal tax laws. During the period in which the crimes were committed, Swan resided in Auburn, New Hampshire.



Swan was sentenced by U.S. District Chief Judge Paul J. Barbadoro, who presided over Swan's trial. Judge Barbadoro increased Swan's sentence on the grounds that Swan obstructed justice by testifying falsely at trial. Judge Barbadoro also increased Swan's sentence, because the evidence at trial showed that Swan filed frivolous lawsuits against, threatened and sought the baseless criminal prosecution of IRS employees and other government officials who lawfully tried to assess and collect taxes from him. Under federal law, Swan will not be eligible for parole.



According to the evidence at trial, during the period 1997 through 2002, Swan prepared hundreds of so-called "zero-income" tax returns for customers of his tax return preparation business. On those returns, Swan reported that the customers did not have any income even though he knew that his customers had received substantial wages, salaries and other compensation. The evidence at trial further showed that, in 1997, Swan filed two amended returns for himself falsely reporting that he had no income for tax years 1993 and 1994. Those amended returns sought refunds of taxes Swan had paid previously for those years. Finally, the evidence showed that, after the Internal Revenue Service initiated collection efforts against him, Swan obstructed the administration of the tax laws through a continuing campaign to harass and intimidate the IRS, its employees and third parties lawfully complying with IRS collection requests.



At trial, Swan testified in his own defense that he was a former disciple of notorious tax protestor, Irwin Schiff. He further testified that, based upon Schiff's teachings and his own research, he sincerely believed that there was no law making anyone liable for the federal income tax. Swan also claimed that he believed that the federal income tax was unconstitutional, a claim which the Court had already ruled did not constitute a defense to the crimes charged. The government's evidence established that Swan was fully aware of his legal obligation to file accurate tax returns and pay taxes that were due.



The evidence established that Swan prepared more than 200 tax returns for others, making false claims for refunds in excess of $1 million dollars and generating a tax loss of approximately $3.2 million. Swan promoted his tax return preparation business by holding seminars entitled, "How Anyone Can LEGALLY Stop Paying Income Taxes" at hotels in Manchester between 1997 and 2002. Swan advertised these seminars in numerous local and regional newspapers. The evidence further demonstrated that Swan encouraged others to file Forms W-4 falsely claiming exempt status to stop the withholding of income taxes. Finally, the evidence showed that Swan initiated numerous frivolous lawsuits and sought the baseless criminal prosecution of IRS collection employees and banks, title companies, and even a recorder of deeds for complying with lawful IRS liens and levies.



United States Attorney Colantuono stated: "Today's sentence is a great one for all tax compliant residents of New Hampshire. All citizens must pay their fair share of the costs of the freedom and privileges of living in this country. The substantial sentence imposed in this case should serve as a clear warning to those attracted by tax protestors' false claim that there is no legal requirement to pay federal income taxes."



Joseph Galasso, Special Agent in Charge of the IRS's Criminal Investigation Division in Boston stated: "Today's sentencing sends a clear message to those who believe that there is no legal requirement to pay federal income taxes. The IRS will aggressively pursue and prosecute those who do not follow the law that requires taxpayers to accurately report and timely pay any tax due."



The case was investigated by the Internal Revenue Service's Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Bill Morse and Jim Chapman, a Trial Attorney with the Department of Justice.



For more information about illegal tax schemes, taxpayers should go to www.irs.gov, and use the keyword, "TAX FRAUD."

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Get the TRUTH about Paytriots and Tax Protestor Scams at http://quatloos.com

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Sunday, June 13, 2004

For years, tax protestors pointed to the existence of Judge John Rizzo, who would attend various tax protestor events and opine that the income tax was unconstitutional. The good judge was most active in helping sell memberships in Global Prosperity Group -- the leaders of which have been recently indicted. Indeed, it is speculated that the good judge's plea agreement, described below, is in exchange for his agreeing to help prosecute the GPG scammers. Oh, and John Rizzo never went to law school, and never was a real judge. Instead, he was simply a small claim justice in some small town in Arizona.

SELLERS OF BOGUS TAX ADVICE PROGRAM
PLEAD GUILTY TO TAX CHARGES

WASHINGTON, D.C. - Two Arizona residents pled guilty today to charges
they failed to report income earned from a widely marketed tax seminar
program, Assistant Attorney General for the Tax Division Eileen J. O'Connor, U.S.
Attorney for the District of Arizona Paul K. Charlton and Internal Revenue
Service Criminal Investigation Chief Nancy J. Jardini announced.

John J. Rizzo and wife Carol A. Rizzo pled guilty to felony charges of
conspiracy and to charges of willfully failing to file their income tax
return. Rizzo also pled guilty to felony charges of willfully aiding and

assisting in the preparation of a false income tax return and perjury
before the grand jury.

"Unscrupulous tax scam promoters aggressively market a variety of fanciful
schemes purporting to eliminate tax liability," said Assistant Attorney
General O'Connor. "People who promote or participate in such schemes are
risking serious civil penalties, and when appropriate, criminal prosecution."

The defendants admitted, in their plea agreements that from 1999 to 2001,
Mr. Rizzo was a prominent vendor with the Institute of Global Prosperity
(IGP). At seminars hosted by IGP, Mr. Rizzo promoted the Millennium 2000

Reliance Defense Program (M2K) package to thousands of people at offshore seminars and resulted in more than $4 million in sales. At an earlier court hearing, as reflected in a videotape made available to the court, Mr. Rizzo appeared at these seminars wearing judicial robes and portrayed himself as a judge and an expert on tax law.

The Rizzos also admitted Mr. Rizzo sold each M2K package for
approximately
$2,300.00. Additionally, they admitted they provided materials and
documentation that purported to prove, among other things, that one
could
lawfully stop filing income tax returns and cease having income taxes
withheld from personal wages based upon the long-rejected notion that
the
Sixteenth Amendment to the Constitution had not been legally ratified.

They further admitted they concealed the income earned from the sales of
M2K
packages during the period 1999 through 2002, by using a variety of
dishonest and deceitful means, including the use of offshore bank
accounts
and third-party merchant accounts to conduct credit card sales. The
Rizzos
have been in pre-trial detention for the past ten (10) months.

In December 2003, Cheryl Cully, a co-defendant in the case, pled guilty
to a
felony charge of obstruction of justice and a charge of willfully
failing to
file her 2001 income tax return. Ms. Cully faces maximum potential
sentences
totaling six (6) years' imprisonment, fines totaling $500,000 and
liability
for the costs of prosecution. Ms. Cully is scheduled to be sentenced
before
Judge Silver on March 29, 2004.

"The IRS continues to aggressively enforce tax laws in order to ensure a

strong American economy and that all taxpayers pay their taxes," said
Nancy
Jardini. "These defendants used a myriad of arguments and abusive
financial
arrangements to evade taxes. In this case, unlawful offshore banking
used
for the purpose of evading the payment of taxes has been unmasked by the

financial investigative efforts of IRS special agents."

Rizzo faces a maximum potential sentence of fourteen years in prison,
ten
years of supervised release, fines totaling $1,000,000, as well as
liability
for the costs of prosecution. Mrs. Rizzo faces a maximum potential
sentence
of six years in prison, fines totaling $500,000 and liability for the
costs
of prosecution. Judge Roslyn O. Silver of the U.S. District Court for
the
District of Arizona has scheduled sentencing for September 27, 2004.

Assistant Attorney General O'Connor thanked Tax Division trial attorneys

Edward Groves, Larry Wszalek and Mark Odulio for prosecuting the case.
She
also thanked the special agents of the Internal Revenue Service whose
assistance was essential to the successful investigation and prosecution
of
the case.

More information about the Justice Department's Tax Division can be
found at
.




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Get the TRUTH about Paytriots and Tax Protestor Scams at http://quatloos.com

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Monday, June 07, 2004

In case you've missed it, one of the quickest ways to go to jail is to try to use Pure Trusts to avoid taxes. Just ask Mark Poseley of "Innovative Financial Consultants" who will probably do about a six-year stint for his selling of Pure Trusts.

FOR IMMEDIATE RELEASE
MONDAY, JUNE 7, 2004
WWW.USDOJ.GOV
TAX
(202) 514-2007
TDD (202) 514-1888

PROMOTER OF SHAM TRUSTS PLEADS GUILTY
TO TAX FRAUD CHARGES IN ARIZONA

Defendant Sold Tax Schemes Through “Innovative Financial Consultants”

WASHINGTON D.C. - Eileen J. O’Connor, Assistant Attorney General for the Tax Division, Department of Justice; Paul K. Charlton, U.S. Attorney for the District of Arizona; and Nancy Jardini, Chief, Internal Revenue Service Criminal Investigation Division, announced today that at the federal courthouse in Phoenix, Arizona, before U.S. District Judge Mary H. Murguia, Mark D. Poseley pled guilty to a felony charge of conspiracy (18 U.S.C. §371) to defraud the Internal Revenue Service (IRS) for his role in marketing bogus trusts through an organization known as Innovative Financial Consultants (IFC). Mr. Poseley also pled guilty to a charge of willfully failing to file his 2000 income tax return, despite having earned substantial income from his work with IFC.

On April 4, 2003, Mr. Poseley was indicted - along with Dennis O. Poseley, Patricia Ann Ensign, John F. Poseley, David W. Trepas, Rachel McElhinney, Jeffrey G. Lewis, Keith D. Priest, and Frank C. Williams - for conspiring to defraud the IRS. Mr. Poseley faces a maximum potential sentence of six years in jail, followed by up to four years of supervised release, $500,000 in fines and liability for the costs of prosecution. Judge Murguia scheduled sentencing for September 13, 2004.

“Putting money into a trust does not exempt it from taxation,” said Assistant Attorney General Eileen J. O’Connor. “People who act as though it does risk criminal prosecution and jail. And in the end, they will still owe the taxes, with interest and penalties added.”

“IRS Criminal Investigation has made the investigation of individuals who market or who intentionally buy into abusive tax schemes a national priority. It is a matter of maintaining public confidence in the fairness of the tax laws,” said Nancy Jardini, IRS Chief, Criminal Investigation. “Trusts established to hide the true ownership of assets and income or to disguise financial transactions are considered sham trusts.”

The indictment alleges that from 1995 to 2003, IFC, based in Tempe, Arizona, created and sold over 3,000 bogus “onshore” and “offshore” trust packages by falsely claiming that taxpayers could avoid paying income taxes if they placed their income and assets into such trusts. IFC allegedly sold each onshore trust package for approximately $4,154, and each offshore trust package for approximately $10,500. According to the indictment, IFC enabled its clients to retain control and use of any income and assets they placed into the trusts, while making it more difficult for the IRS to track the true ownership of income and assets.

In his plea agreement, Mr. Poseley admitted he worked as an IFC salesman and sold both onshore and offshore trust packages. He admitted that he falsely represented to taxpayers that they could lawfully avoid paying income taxes by placing their income and assets into trusts, despite remaining as the trusts’ “managing directors.” Mr. Poseley acknowledged he knew the IFC clients, as “managing directors,” retained control over any income and assets they placed into their trusts. He admitted he ignored written publications from the IRS and other sources which directly contradicted the false claims he made. He also admitted that for the year 2000, he earned substantial gross income from the sale of IFC’s trust packages but willfully failed to file an income tax return and report that income to the IRS.

Assistant Attorney General O’Connor thanked Tax Division Trial Attorneys Larry J. Wszalek and Mark T. Odulio, who prosecuted the case. She also thanked the special agents of the Internal Revenue Service, whose assistance was essential to the successful investigation and prosecution of the case.

On December 11, 2003, John F. Poseley pled guilty to the conspiracy charge and is awaiting sentencing. Trial of the remaining defendants is scheduled to begin in August 2004. The charges contained in the indictment are only allegations. In the American justice system, a person is presumed innocent unless and until he or she is proven guilty in a court of law.



__________
Get the TRUTH about Paytriots and Tax Protestor Scams at http://quatloos.com

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