Four Promoters of Tax Defiance Scheme Sentenced to Prison
One Promoter Previously Sentenced in Connection with Actor Wesley Snipes
WASHINGTON- Four promoters of a Florida-based business that sold illegal tax defiance schemes, American Rights Litigators/Guiding Light of God Ministries (ARL), were sentenced today by U.S. District Judge Royce C. Lamberth, the Justice Department and Internal Revenue Service (IRS) announced today. All four defendants were convicted in May 2010 following a one-month jury trial.
Eddie Ray Kahn, formerly of Sorrento, Fla., was sentenced to 20 years in prison for conspiracy to defraud the United States and to commit mail fraud and one count of mail fraud. Stephen C. Hunter, formerly of Candler, Fla., and Danny True, of Deltona, Fla., were sentenced to 10 years in prison for conspiracy to defraud the United States and three counts of mail fraud. Allan J. Tanguay, of Flagler Beach, Fla., was sentenced to 10 years in prison for conspiracy to defraud the United States and to commit mail fraud and one count of mail fraud.
The evidence at trial showed that Kahn founded and ran ARL from 1996 through 2004. During that time, ARL enrolled more than 4,000 customers from all 50 states and the District of Columbia. Defendants Hunter, True and Tanguay worked at ARL with Kahn to develop and sell tax defiance schemes based on deliberate misrepresentations of the legal foundation of the tax system.
The evidence at trial showed that the purpose of the tax defiance schemes promoted by the four men was to thwart the IRS in its attempts to assess and collect taxes by various means. These schemes included manufacturing and selling more than one thousand worthless “bills of exchange” supposedly drawn on the U.S. Treasury for customers to use in purported payment of their taxes, as well as producing false and harassing complaints against IRS employees that were sent to the Treasury Inspector General for Tax Administration (TIGTA) in Washington, D.C.
The Justice Department filed a lawsuit against ARL which resulted in a December 2003 preliminary injunction ordering ARL to cease selling its schemes. The evidence at trial showed that the defendants continued to prepare fraudulent and obstructive correspondence to the IRS on behalf of ARL customers, even after the entry of that order.
“This is precisely the type of conduct the Tax Division is committed to stopping under the National Tax Defier Initiative,” said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. “Those who promote illegal tax defiance face prosecution and lengthy prison terms.”
“Today, justice is served, and these four individuals are being held accountable for their criminal actions. The manufacturing of worthless ‘bills of exchange’ was nothing more than a sham to disguise their intent to evade the payment of taxes,” said Victor S.O. Song, Chief, IRS Criminal Investigation. “IRS special agents work diligently to identify and bring to prosecution both those who evade their taxes, and those who assist others in evading their tax obligations – it’s a matter of maintaining public confidence in our system of taxation.”
Acting Assistant Attorney General DiCicco commended the IRS and TIGTA agents who investigated the case, as well as Tax Division Trial Attorneys Jeffrey McLellan, Tino Lisella, and Melissa Siskind, who prosecuted the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax.
Kahn’s previous sentence in the Wesley Snipes case: www.justice.gov/tax/usaopress/2008/txdv08343.htm.
ARL injunction: www.justice.gov/tax/prtax/txdv03730.htm.