WASHINGTON – Edward T. Woodger of Salt Lake City was sentenced today to 60 months in prison for conspiring to defraud the United States and to commit mail and wire fraud in connection with the promotion of a tax fraud scheme, the Department of Justice and the Internal Revenue Service (IRS) announced today. U.S. District Judge Ted Stewart also ordered Woodger to pay restitution in the amount of $2,943,865 and to serve three years of supervised release upon the completion of his term of imprisonment.
Defendant Woodger is one of eleven individuals who promoted a tax fraud scheme that involved the use of trusts. The other conspirators included four attorneys, a CPA, and a former IRS revenue agent, all of whom have pleaded guilty in this case.
“People who promote tax evasion schemes harm all honest taxpayers,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Department of Justice continues to vigorously prosecute scam artists who help others evade taxes.”
“Promoting abusive trusts and tax schemes for the purpose of committing tax evasion isn’t tax planning; it’s criminal activity,” said Nancy Jardini, IRS Chief, Criminal Investigations. “The IRS continues to focus enforcement resources on efforts to shut down fraudulent tax schemes and hold the promoters of these schemes accountable for their actions.”
In his plea agreement, Woodger admitted that beginning in 1998, as a salesman of “World Contractual Services,” he promoted and sold a fraudulent trust scheme designed to evade federal income taxes. In seminars, promotional materials and opinion letters, World Contractual Services fraudulently misrepresented to customers that their tax liabilities could be lawfully reduced by placing businesses, homes, investments and other assets into a trust’s name. Woodger admitted that he and his co-conspirators caused the preparation of more than 2,000 false and fraudulent federal income tax returns that cost the federal Treasury between $2,500,000 and $5,000,000.
Woodger also admitted participating in investment fraud that resulted in customers losing between $2.5 million and $5 million. Woodger held himself out to customers as the "offshore money man." He also admitted that he and his co-conspirators commingled and misappropriated customers’ funds by making material misrepresentations regarding the risks of domestic and offshore investments, by falsely claiming that they had expertise in the area of investments, and by failing to disclose their personal interest in various investments.
Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division O’Connor and Brett L. Tolman, U.S.Attorney for the District of Utah, thanked Tax Division trial attorneys Nicholas D. Dickinson and Lea A. Carlisle who prosecuted the case. They also thanked the special agents of the Internal Revenue Service and Federal Bureau of Investigation whose assistance was essential to the successful investigation and prosecution of the case.