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Promoters Sentenced to Prison for Tax Fraud Scheme

WASHINGTON — A federal judge in San Diego sentenced Susan E. O’Brien, a professional tax preparer who operated The O’Brien Group, to 10 years and five months in prison. As part of the sentence, she will also serve a three-year term of supervised release and pay restitution in the amount of $113,179.

Judge M. James Lorenz also sentenced co-defendants Robert Richard Evans and William Dean Cook to prison terms of 78 and 24 months, respectively. Both Evans and Cook will each serve a three-year term of supervised release.

“Dishonest tax professionals harm the good reputation of honest ones and cheat all honest taxpayers,” said Eileen J. O’Connor, Assistant Attorney General for the Department of Justice’s Tax Division. “People who prepare fraudulent returns or peddle tax scams can expect to be prosecuted, convicted and sent to prison.”

In July 2003, O’Brien, Evans, Cook and five others were charged in a 78-count indictment with various tax crimes related to tax years 1996-2002. According to the indictment and trial evidence, O’Brien prepared numerous income tax returns that claimed false business deductions and Evans promoted, sold and managed domestic trusts that were used by clients to conceal income and assets from the IRS.

On May 2, 2006, after an eleven-week trial, the jury convicted O’Brien, Evans and Cook of attempting to evade the taxes of a former client, Dr. Kevin Marie Scoggin, for the years 1996 through 2000. Scoggin owned and operated Grand Animal Hospital, a veterinary clinic in the San Diego area, where Cook worked as a manager during the 1990s and early 2000s. Cook and Scoggin concealed Scoggin’s income and assets by using one of Evans’ trusts and by holding offshore bank accounts, maintaining bank accounts in nominee names and assigning income to nominee entities.

“Honest return preparers and tax professionals assist taxpayers in filing their correct tax information with the government. Blatant disregard for the law as well as for the standards of this profession must be addressed and halted,” said Nancy Jardini, Internal Revenue Service Chief, Criminal Investigation. “These sentences clearly demonstrate the IRS and Department of Justice efforts to ensure tax professionals are abiding by the law.”

The jury also convicted O’Brien and Evans of conspiracy to defraud the United States and aiding and assisting in the filing of fraudulent tax returns. O’Brien also was convicted of evading the payment of tax on her own income. U.S. District Judge Lorenz found that the tax-evasion scheme resulted in a tax loss of more than $1 million. Three employees and four clients of The O’Brien Group were convicted of felony tax fraud charges as part of this prosecution. These defendants pleaded guilty to tax fraud charges prior to trial and cooperated in the prosecution of O’Brien, Evans and Cook.