WASHINGTON - Craig Shaber, a practicing attorney from San Diego County, Calif., pleaded guilty Thursday in federal court before U.S. Magistrate Judge Anthony J. Battaglia to one count of tax evasion for the 2000 tax year, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the indictment and other documents filed in San Diego federal court, between the years 1999 and 2002, Shaber and Steven Wright, an accountant who pleaded guilty to tax evasion in August 2009, fraudulently acquired control of numerous public shell companies. They acquired control of the companies by, among other things, installing nominee officers and directors and submitting false registration statements and reports to the U.S. Securities and Exchange Commission (SEC) and the National Association of Securities Dealers, now known as the Financial Industry Regulatory Authority.
Shaber and Wright earned millions of dollars from the sale of these public shell companies and deposited the proceeds into a bank account in the name of Bonaventure Capital Ltd., and one of Shaber’s client trust bank accounts. In 2002, Shaber and Wright received $260,000 in cash from the sale of one of these companies. In 2003, the SEC filed a complaint related to Shaber’s and Wright’s conduct selling these public shell companies.
According to the indictment and other documents filed in the case, Shaber and Wright then evaded taxes on the millions of dollars earned from the sale of the public shell companies. They withdrew these proceeds for their own personal benefit and concealed their receipt of the income. Shaber and Wright disbursed these funds to various bank accounts in the names of nominee entities that they controlled and used accounts in the names of nominee entities to pay for personal expenses.
Shaber used the proceeds from the shell company scheme to purchase numerous luxury items, including his personal residence in Coronado, Calif., a McDonnell Douglas helicopter, a World-War-II-era Tigercat airplane, a Plymouth Prowler, a Porsche 996 Turbo and art work. Wright also purchased significant assets, including property in Poway, Calif., a condominium in Mammoth Lakes, Calif., a BMW X5 and art work.
Shaber’s sentencing is set for Jan. 21, 2011, and Wright’s sentencing is scheduled for Feb. 28, 2011.
These cases are being investigated by IRS Criminal Investigation and are being prosecuted by Tax Division Trial Attorneys Christopher J. Maietta and Timothy J. Stockwell.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.