WEDNESDAY, APRIL 13, 2005
TDD (202) 514-1888
JUSTICE DEPARTMENT SUES TO HALT ARIZONA TAX SCAM
Treasury Loss Estimated To Exceed $15 Million
WASHINGTON, D.C.-The Justice Department today asked a federal court to bar Dennis H. Lawrence and James G. Morris, both of Mesa, Arizona, and Allen Vanderwey, of Tempe, Arizona, from promoting an alleged tax scam that uses sham trusts and corporations. In its complaint, filed in Phoenix, the government estimates that the defendants’ conduct has cost the federal treasury more than $15 million. The government is also seeking an order directing the defendants to provide the government their customers’ names, telephone and Social Security numbers, and mailing and e-mail addresses.
The government alleges that Lawrence, whose business is called Legal Ease, LLC, helps customers set up entities-trusts, limited liability companies, and corporations-intended to illegally eliminate or reduce their reported federal tax liabilities. Customers allegedly claim deductions for non-deductible personal expenses and evade paying income and Social Security taxes. Vanderwey allegedly promotes Lawrence’s schemes through a network of more than 300 insurance agents, and Morris allegedly prepares false tax returns for customers who use the schemes. The complaint also asks the court to permanently bar Morris from working as a tax return preparer.
“Stopping the promotion of tax fraud is a high priority for the Justice Department,” said Eileen J. O’Connor, Assistant Attorney General for the Department of Justice’s Tax Division. “People who use these schemes risk civil penalties and, where appropriate, criminal prosecution.”
Misuse of trusts tops the IRS’s 2005 list of the “Dirty Dozen” tax schemes, information about which is available at <http://www.irs.gov/newsroom/article/0,,id=136337,00.html>. More information about the Justice Department’s efforts against tax-scam promoters can be found at <http://www.usdoj.gov/tax/taxpress2005.htm>. Information about the Justice Department’s Tax Division can be found at <http://www.usdoj.gov/tax>.