WASHINGTON - Timothy Shawn Dunn, a Chesterton, Ind., resident, was sentenced to 210 months in prison by U.S. District Judge Charles R. Norgle, the Justice Department and Internal Revenue Service (IRS) announced today.
Dunn was the fourth of six defendants to be sentenced after being convicted of various tax crimes in May 2008. Prior to his conviction, Dunn owned Moneyfacts, a financial advisory business in Highland, Ind. Dunn and his co-defendants were found to have carried out a nearly decade-long scheme to market and sell sham domestic and foreign trusts through the Aegis Company, now defunct and formerly based in Palos Hills, Ill., to some 650 wealthy taxpayer clients. According to court documents and evidence at trial, the tax fraud scheme used a network of promoters, sub-promoters, managers, attorneys and accountants and resulted in a $60 million dollar tax loss to the United States.
In addition to 17 years and 6 months in prison, Judge Norgle sentenced Dunn to three years of supervised release. Dunn also remains liable for approximately $315,000 for his own unpaid taxes, plus penalties and interest owed. In addition to the tax fraud conspiracy, Dunn was found guilty of and sentenced on 11 counts of aiding and assisting in the filing of false returns, one count of personal income tax evasion and two counts of filing false personal income tax returns.
"Today's sentence sends a powerful and unequivocal message to those who seek to evade and help others evade their taxes, that they will be investigated, prosecuted, convicted and sent to prison for years," said Nathan J. Hochman, Assistant Attorney General for the Justice Department's Tax Division.
Dunn and his five co-defendants were convicted following an 11-week trial. The defendants were indicted in 2004, following a lengthy undercover investigation by IRS agents, code-named "Operation Trust Me," and the seizure of roughly 1.5 million documents, computer files and related materials. Nationwide, the Chicago-based investigation has resulted in convictions of more than 30 defendants and charges against approximately 30 other defendants around the country, including in Florida, Illinois, New York, Ohio and West Virginia.
"The IRS is aggressively pursuing anyone who helps wealthy individuals hide their assets and dodge the tax system," said IRS Commissioner Doug Shulman. "Promoters of foreign and domestic tax schemes and their investors should know the IRS and the Department of Justice are in active pursuit."
Three of Dunn's co-defendants already have been sentenced by Judge Norgle. Michael A. Vallone, of Orlando Park, Ill., was sentenced to 18 ½ years in prison in October 2008. Vallone was one of the founders and the executive director of Aegis. Also in October 2008, William S. Cover, of Naperville, Ill., a promoter and manager of Aegis trusts and the president of Sigma Resource Management Inc., which provided management services to purchasers of Aegis trusts, was sentenced to 13 years in prison and ordered to forfeit his home and $4.125 million. In November 2008, Michael T. Dowd, of Glenview, Ill., a promoter and manager of Aegis trusts who provided management services to purchasers of Aegis trusts through Aegis and Sigma Resource Management Inc., was sentenced to 10 years in prison.
The remaining two defendants, who have not yet been sentenced, are Edward B. Bartoli of Clearwater, Fla., a former attorney who was also one of the founders of Aegis and was its legal director; and Robert W. Hopper of Gadsden, Ala., also one of the founders of Aegis and the managing director.
Two other defendants in this case, David E. Parker of Williamsville, N.Y., an attorney who was the legal director of the Aegis Management Company, and John C. Stambulis of Palos Heights, Ill., an attorney and a trust counsel of Aegis, both pleaded guilty and testified for the government at trial. They also are awaiting sentencing.
Assistant Attorney General Hochman thanked IRS-Criminal Investigation Division agents for their hard work, and Assistant U.S. Attorneys Stephen L. Heinze and Barry Rand Elden, and Tax Division trial attorney Thomas W. Flynn, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax.