Madsen, a chiropractor from Ephraim, Utah, was convicted today after a jury trial in the U.S. District Court in Salt Lake City of income tax evasion, the Justice Department announced.
According to court documents, Madsen owed more than $1.3 million in assessed income tax, interest and penalties for the years 1995, 1999, 2000, 2001, 2002, 2003 and 2004. According to court documents, Madsen’s tax debt had grown to more than $1.7 million, after accrued interest. The evidence presented at trial showed that Madsen failed to file a tax return for the last 10 years, and also failed to make any voluntary payments on his tax debt for the past decade.
According to court documents, Madsen used nominee trusts to conceal the ownership of property, ultimately causing the transfer of that property to Grand Scale Inc., a Washington corporation of which he was the president, vice president, secretary, treasurer and chairman of the board. In addition, Madsen used other entities to encumber property and cloud equity in that property, using entities such as Entry Level and Willow Valley Trust. According to court documents, Madsen also attempted to obstruct Internal Revenue Service (IRS) levies, on two occasions sending letters to the purchaser of his chiropractic business, once threatening the possibility of felony charges. Madsen was previously held in civil contempt by the U.S. District Court, for failure to comply with court orders with respect to an IRS Madsen faces a potential maximum sentence of 5 years in prison and a fine of up to $250,000, or twice the gross gain or loss resulting from the offense.
Trial Attorneys Jennifer R. Laraia and Leslie A. Goemaat from the Tax Division prosecuted this case on behalf of the United States. The case was investigated by the IRS-Criminal Investigation’s Salt Lake Field Office.