FOR IMMEDIATE RELEASE|
WEDNESDAY, DECEMBER 31, 2003
TDD (202) 514-1888
FEDERAL COURT BARS SORRENTO, FLORIDA MAN AND OTHERS FROM SELLING COUNTERFEIT CHECKS AND OTHER TAX SCAMS
WASHINGTON, D.C. - The Justice Department today announced that the U.S. District Court for the Middle District of Florida in Orlando has barred five defendants from promoting several abusive tax schemes. The schemes include selling counterfeit checks, setting up sham corporations to hide customers’ income and assets, and helping customers obstruct IRS investigations and collections.
On December 8, 2003, the Justice Department filed a complaint and moved for a preliminary injunction against Eddie and Kathleen (“Kookie”) Kahn of Sorrento, Florida; Milton Hargraves Baxley, II, a lawyer from Gainesville, Florida; David Stephen Lokietz of Mt. Dora, Florida; Bryan Malatesta, a certified public accountant in Cleburne, Texas; and Eddie Kahn’s businesses - American Rights Litigators, Guiding Light of God Ministries, as well as Eddie Kahn and Associates.
After a hearing, the court concluded that the defendants sell several abusive tax schemes, including counterfeit checks and bonds for customers to send to the Internal Revenue Service. The court also found that defendants sell sham entities known as “corporations sole,” which defendants falsely advise their customers will make their income tax-exempt and their assets collection-proof. The court further found that defendants interfere with the administration of the internal revenue laws by sending frivolous and harassing letters to the Internal Revenue Service and third parties, making false and frivolous complaints to the Inspector General of the U.S. Treasury Department, assisting customers in hiding assets from the Internal Revenue Service, advising customers to obstruct Internal Revenue Service examinations and collections, advising customers not to file federal tax returns or pay federal taxes, and continuing this activity even after two of their customers were convicted of tax crimes and Baxley was sanctioned by two federal district courts.
“Tax-scam promoters cheat their customers - who can expect to pay back taxes, interest and penalties, and may face criminal prosecution for evading taxes and presenting counterfeit documents,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “These con artists also cheat the vast majority of citizens who abide by the law and pay their taxes. The Justice Department is committed to shutting down tax-evasion schemes at their source.”
Today’s preliminary injunction, entered by Judge William Terrell Hodges, bars the defendants from:
In addition, the preliminary injunction orders the defendants to give the federal government their customer list, remove abusive tax scheme materials from their websites and post the preliminary injunction on their websites.
The Justice Department has sought and obtained injunctions recently against a number of tax-scam promoters. More information about these cases is available on the Justice Department website at http://www.usdoj.gov/tax/taxpress2003.htm. More information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax.