WASHINGTON Ė Lynn Lakers, a Boulder City, Nev., tax-return preparer, has been permanently barred in connection with an alleged offshore-trust tax scam, the Justice Department announced today. It is alleged that Lakers, participating with three others, prepared false tax returns for phony trusts sold by her fellow defendants. She consented to the injunction order. According to the complaint, the Internal Revenue Service (IRS) estimates that this tax fraud scheme resulted in at least $31 million in lost revenue to the federal Treasury.
The other two defendants who consented to a permanent injunction earlier this year are Daniel Young of Las Vegas, who allegedly created phony domestic and foreign trusts to move customersí assets from the United States to offshore banks located in the West Indies, and Stephen Nestor of Boise, Idaho, a former IRS revenue officer who allegedly signed false tax returns on behalf of customersí bogus trusts. The case remains pending against a fourth defendant, Reinhold Sommerstedt. More information about this case is available at http://www.usdoj.gov/tax/txdv06122.htm.
Judge Brian E. Sandoval of the U.S. District Court for the District of Nevada entered injunctions against Nestor and Young in May 2006 and against Lakers on Nov. 20th. The injunctions prevent the three individuals from promoting the alleged tax-fraud scheme or preparing tax returns based on it. They must also give the government a list of their customersí names, addresses, e-mail addresses, telephone numbers, and Social Security numbers. Nestor and Young have already complied with this portion of the injunction order.
According to the governmentís complaint, the scheme allegedly helped customers hide their income from the IRS in Caribbean bank accounts. The defendantsí customers allegedly used phony loans and gifts to repatriate their money while concealing it from the IRS. Customers allegedly paid as much as $14,500 to participate in the scheme.
Offshore transactions and trust misuse are two of the IRSís Dirty Dozen tax scams for 2006, which are listed at http://www.irs.gov/newsroom/article/0,,id=154293,00.html.
Since 2001 the Justice Department has obtained injunctions against more than 200 tax-fraud promoters and tax-return preparers. More information about these efforts can be found at http://www.usdoj.gov/tax/taxpress2006.htm. Information about the Justice Departmentís Tax Division can be found at http://www.usdoj.gov/index.html.