FOR IMMEDIATE RELEASE|
TUESDAY, OCTOBER 26, 2004
TDD (202) 514-1888
RENAISSANCE, THE TAX PEOPLE PROMOTERS INDICTED FOR $84 MILLION TAX FRAUD
Promoters Operated Pyramid Scheme; Founder Cooper Arrested Yesterday
WASHINGTON, D.C. - Eileen J. OConnor, Assistant Attorney General for the Tax Division, United States Department of Justice; Eric Melgren, United States Attorney for the District of Kansas; and Nancy Jardini, Chief, Internal Revenue Service Criminal Investigation Division announced today that Michael Craig Cooper was arrested late yesterday crossing the border from Mexico to the United States near Laredo, Texas. They also announced that on August 13, 2004, a federal grand jury returned a 148-count indictment charging Mr. Cooper, together with Jesse Ayala Cota, Todd Eugene Strand, Daniel Joel Gleason, and Renaissance, The Tax People Inc. (Renaissance) with conspiracy to defraud the United States by impeding the Internal Revenue Service and to commit mail and wire fraud (18 U.S.C. §371), willfully assisting in the preparation of fraudulent federal income tax returns (26 U.S.C. § 7206(2)); mail fraud (18 U.S.C. §1341) and wire fraud (18 U.S.C. §1343). Mr. Cooper and Renaissance are also charged with money laundering and conspiracy to commit money laundering (18 U.S.C. 1956) and engaging in monetary transactions in criminally derived property of a value greater than $10,000 (18 U.S.C. 1957). The indictment remained sealed pending yesterdays arrest of Mr. Cooper.
Fraudulent tax schemes will be investigated and prosecuted to the fullest extent of the law, said Assistant Attorney General Eileen J. OConnor. People who promote or join schemes to hide income from the IRS risk criminal prosecution and, upon conviction, a lengthy term of imprisonment.
Today's action is an example of how the government will not tolerate abusive tax fraud schemes. Those who attempt to manipulate the interpretation of the tax laws for their own personal gain at the expense of others will be held accountable, stated Nancy Jardini, Chief, IRS Criminal Investigation. The honest, hardworking American taxpayer pays the price for these scams against the government and the IRS will continue to do its job of investigating organizations that engage in this type of activity.
The indictment alleges that from June 1997 though April 2002, the defendants operated a scheme to defraud the IRS and other individuals by marketing a program designed to sell individuals tax deductions through false, fraudulent and misleading representations. According to court papers, Renaissance sold was a fraudulent home-based business package through which it offered tax support to its members in the form of purportedly legitimate tax return preparation, tax advice and audit protection. Participants, referred to as Individual Marketing Associates (IMAs), were allegedly encouraged to modify their Forms W-4 to decrease the amount of income taxes withheld from their pay in order to afford the $300 to $1,200 purchase price for a Renaissance package. The defendants allegedly promoted the unlawful deduction of personal expenses as if they were legitimate business expenses. They also allegedly made false assurances as to the legality of Renaissances activity during meetings and in promotional material, going so far as to infer that the IRS had approved the Renaissance tax program. They also allegedly concealed material facts about the business package, including the actual income potential for IMAs. The indictment alleges the defendants operated an illegal pyramid scheme, requiring IMAs to pay monthly fees to qualify for commissions and offering IMAs the opportunity to receive commissions and bonuses for recruiting others to join Renaissance.
The indictment alleges that the individual defendants were involved in the scheme as follows:
The indictment also seeks the forfeiture of $84 million in United States currency plus land, vehicles, gold coins, bank accounts, and life insurance polices-the amount allegedly obtained directly or indirectly from these offenses.
The charges contained in the indictment are only allegations. In the American justice system, a person is presumed innocent unless and until he or she is proven guilty in a court of law.