FOR IMMEDIATE RELEASE|
FRIDAY, MAY 13, 2005
TDD (202) 514-1888
FEDERAL COURT BARS SEATTLE-AREA COUPLE
FROM PROMOTING TAX-FRAUD SCAMS
WASHINGTON, D.C. - The Justice Department announced today that a federal court in Seattle has barred John and Candace Sinclair of Kirkland, Washington from selling trusts and other so-called asset-protection devices that help customers illegally evade taxes. In entering the preliminary injunction, Judge Thomas S. Zilly of the U.S. District Court for the Western District of Washington also ordered the defendants to provide the government their customers’ names, mailing and e-mail addresses, and telephone and Social Security numbers.
Saying that the government presented persuasive evidence, the court found that the government would “suffer irreparable harm” if the injunction was not ordered. In court filings, the government alleged that the Sinclairs, who also operate under the business name Fortress International, help customers set up sham trusts that are used illegally to eliminate or reduce their reported federal tax liabilities. The government also alleged that the Sinclairs market a fraudulent “corporation sole” and “ministerial trust” scheme, falsely telling customers that conducting their personal and business activities through a so-called ministerial trust eliminates their obligations to file federal tax returns or pay federal tax. The Sinclairs allegedly charge customers at least $4,000 for each scam.
“People who buy into tax-fraud schemes are exchanging good money for bad prospects: past due tax bills with interest and penalties, along with the possibility of criminal prosecution,” said Eileen J. O’Connor, Assistant Attorney General for the Tax Division. “The Justice Department and the IRS are committed to stopping the promotion of tax fraud.”
In court filings, the government alleged that the Sinclairs worked with Glen Stoll in promoting the tax-fraud scheme. The Justice Department filed a separate suit against Stoll, of Edmonds, Washington last February in federal court in Seattle. The court entered a preliminary injunction against Stoll last month. Information about the Stoll case is available at <http://www.usdoj.gov/tax/txdv05223.htm>.
Misuse of trusts tops the IRS’s 2005 list of the “Dirty Dozen” tax schemes, which can be viewed at <http://www.irs.gov/newsroom/article/0,,id=136337,00.html>. Information about corporation sole tax scams, number seven on “Dirty Dozen” list, is available at <http://www.irs.gov/newsroom/article/0,,id=121566,00.html>. More information about this case is available at <http://www.usdoj.gov/tax/txdv05011.htm.> 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>.