{"id":51371,"date":"2022-11-16T16:51:08","date_gmt":"2022-11-17T00:51:08","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=51371"},"modified":"2022-11-16T17:02:16","modified_gmt":"2022-11-17T01:02:16","slug":"attorney-and-two-tax-professionals-indicted-for-setting-up-illegal-1-billion-tax-shelte","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=51371","title":{"rendered":"Attorney and Two Tax Professionals indicted for Setting Up Illegal $1 Billion Tax Shelter"},"content":{"rendered":"

DALLAS<\/strong><\/span><\/p>\n

\"\"Officials stated that an attorney and two tax professionals were indicted in the $1 billion Garza tax shelter scheme.<\/span><\/p>\n

\n
\n
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Attorney and CPA Kevin McDonnell and CPA James Richardson, co-owners of tax preparation and accounting firm McDonnell Richardson, P.C., were added to the case in a superseding indictment filed Tuesday. <\/span><\/p>\n

The pair are charged with one count of conspiracy to defraud the United States, one count of conspiracy to commit wire fraud, and five counts of assisting in preparing fraudulent tax returns. \u00a0<\/span><\/p>\n

\"\"Craig Fenton, a tax manager at McDonnell Richardson, was indicted on the same charges.<\/span><\/p>\n

The alleged mastermind of the scheme, attorney Joseph Garza, was previously indicted on 18 counts of wire fraud, one count of conspiracy to commit wire fraud, and 22 counts of aiding and assisting in the preparation of fraudulent income tax returns. <\/span><\/p>\n

The superseding indictment added a charge of conspiracy to defraud the United States.<\/span><\/p>\n

\"blackAccording to the court documents, Mr. Garza allegedly directed his clientele to use hand-picked tax professionals \u2013 including Mr. McDonnell, Mr. Richardson, and Mr. Fenton \u2013 who helped him illegally shelter their otherwise taxable income. \u00a0<\/span><\/p>\n

Mr. Garza allegedly charged clients a percentage of the predetermined amount of money they had chosen to shelter from taxes; Mr. McDonnell, Mr. Richardson, and Mr. Fenton were also compensated for their roles in the scheme. \u00a0<\/span><\/p>\n

The defendants allegedly created multiple shell companies \u2013 including shell \u201cservices\u201d companies and shell \u201cinvestments\u201d companies \u2013 to create a circular flow of funds to help clients avoid paying taxes.<\/span><\/p>\n

These shell companies purported to provide services to the clients\u2019 businesses or to serve as family investment vehicles but had no legitimate purpose other than to move money. <\/span><\/p>\n

The defendants allegedly created sham operating agreements and service agreements, fictitious invoices, and false private annuity agreements designed to give the companies the appearance of legitimacy and conceal the scheme from the IRS. \u00a0<\/span><\/p>\n

The defendants then allegedly assisted clients in the preparation and filing of fraudulent tax returns, falsely deducting businesses expenses for services that were never performed, falsely reporting gross receipts for payments that were not earned, falsely deducting payments from the investment company to the taxpayer for annuities that didn\u2019t exist, and underreporting the individual taxpayers\u2019 incomes.<\/span><\/p>\n

The scheme allegedly resulted in more than $1 billion in unreported income and more than $200 million in unpaid taxes.<\/span><\/p>\n

\u201cKevin McDonnell, James Richardson, and Craig Fenton participated in a tax scheme that resulted in $1 billion in unreported income and more than $200 million in unpaid taxes. Now they face severe consequences, including jail time and substantial fines,\u201d said Special Agent in Charge Christopher J. Altemus, Jr, IRS – Criminal Investigation, Dallas Field Office.\u00a0<\/span><\/p>\n

\u00a0All four defendants are presumed innocent until proven guilty in a court of law.<\/span><\/p>\n

IRS \u2013 Criminal Investigations\u2019 Dallas Field Division conducted the investigation with the assistance of the Federal Bureau of Investigation\u2019s Dallas Field Office.\u00a0 <\/span><\/p>\n

Assistant U.S. Attorneys Renee Hunter, Katherine Miller, and Marty Basu of the Northern District of Texas are prosecuting the case with Trial Attorney Robert Kemins of the Justice Department\u2019s Tax Division.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

DALLAS Officials stated that an attorney and two tax professionals were indicted in the $1 billion Garza tax shelter scheme. Attorney and CPA Kevin McDonnell and CPA James Richardson, co-owners of tax…<\/p>\n","protected":false},"author":1,"featured_media":1530,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-51371","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-department-of-justice"],"yoast_head":"\nAttorney and Two Tax Professionals indicted for Setting Up Illegal $1 Billion Tax Shelter<\/title>\n<meta name=\"description\" content=\"DALLAS Officials stated that an attorney and two tax professionals were indicted in the $1 billion Garza tax shelter scheme. 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