Denver attorney indicted along with clients for defrauding the iRS
DENVER – Eva Melissa Sugar, age 59, of Denver, Colorado, Jerry Lynn Roberts, age 45, of Polk City, Florida, and Gregory Nathan Laurence, age 46, of Germantown, Tennessee, were indicted by a federal grand jury in Denver on May 8, 2013 for various charges related to obstructing and defrauding the Internal Revenue Service, the United States Attorney’s Office and IRS Criminal Investigation announced. The indictment was sealed pending the defendants’ first appearance in U.S. District Court. Sugar, a practicing attorney, appeared before a Magistrate Judge in U.S. District Court in Denver last Friday, May 10, 2013, where she was advised of her rights and the charges. Laurence was issued a summons to appear in U.S. District Court in Denver on May 29, 2013. Roberts is at large.
According to the indictment, Sugar and her co-conspirators both known and unknown to the Grand Jury conspired to defraud the United States for the purpose of impeding, impairing, obstructing, and defeating the lawful Government functions of the Internal Revenue Service. Sugar was a resident of Aurora, Colorado, and was self-employed as an attorney specializing in tax and other legal matters in Denver, Colorado. Sugar worked with Financial Fortress Associates (FFA) clients. FFA was an organization that promoted and advised its clients on schemes to avoid the payment of income and other federal taxes.
FFA promoted Pure Trust Organizations (“PTO”) and “private banking” using so-called Unincorporated Business Organizations (“UBOs”) and Banking Unincorporated Business Organizations (“BUBOs”) as vehicles to conceal business and personal income and asset ownership to avoid paying income, employment, and other federal taxes to the IRS. FFA held seminars and workshops around the country to promote its schemes, which individuals paid to attend. Sugar occasionally attended and spoke at FFA seminars. At those seminars, FFA’s promoters explained the schemes and provided referrals to their co-conspirators, including Sugar, who charged fees to execute the schemes for FFA clients. Generally, the FFA client either caused the understating of business gross receipts or overstated expenses for the FFA client’s legitimate business, thereby decreasing the business’s income.
Sugar provided various services to her clients, which as described, included establishing UBOs, applying for EINs for the UBOs, and opening associated BUBO bank accounts that her clients used to conceal assets and income and to avoid paying taxes to the IRS. Sugar generally was the trustee for the UBOs and had signatory authority for the bank accounts. To prevent the client’s name being associated with the BUBO account, Sugar and the client would identify a third party for the fictitious trust entity or account. That person would be given signatory authority but exercised no authority or control the fictitious trust entity and Sugar and her clients had signature stamps created for these individuals.
Roberts was a resident of Florida who worked for Roberts Enterprises, a family-owned fundraising business, and he was a client of FFA and Sugar. Beginning in November 1999 and continuing through April 2008, Roberts and Sugar, aiding and abetting each other, did corruptly endeavor to obstruct and impede the due administration of the Internal Revenue laws by setting up and using BUBO accounts as described in the above paragraphs. Furthermore, in 2008 Roberts attempted to influence, obstruct, and impede the due administration of justice, by making a variety of threats to Internal Revenue Service criminal investigators after the service of Grand Jury subpoenas relating to UBOs he controlled and other organizations.
Laurence was a resident of Tennessee and was a doctor who operated two businesses, Germantown Aesthetics, LP (“GA”) and Germantown Family Care & Obstetrics, LP (“GFCO”). Laurence was also a client of FFA and Sugar. Beginning in January 2002 and continuing through October 2008, Laurence and Sugar, aiding and abetting each other, did corruptly endeavor to obstruct and impede the due administration of the Internal Revenue laws by setting up and using BUBO accounts as described in the above paragraphs. In March 2008 continuing through January 2009, Laurence attempted to influence, obstruct, and impede the due administration of justice, in that, after contact by Internal Revenue Service criminal investigators and the service of Grand Jury subpoenas relating to GA and GFCO.
“As citizens, we all have an obligation to pay our taxes,” said U.S. Attorney John Walsh. “Hiding income on purpose to avoid paying taxes leads to criminal prosecutions and all the consequences that brings.”
“For those thinking about promoting or participating in fraudulent tax schemes should think twice, there is no secret formula that can eliminate a person's tax obligations.” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office. “We owe it to every American taxpayer to identify and prosecute both those who evade their taxes and those who promote and assist them in evading their tax obligations through fraudulent tax schemes.”
Sugar was charged with one count of conspiracy to defraud the United States, one count of failing to file a tax return and two counts of obstructing of IRS laws. Roberts and Laurence were each charged one count of obstructing of IRS laws and one count of obstruction of justice. Conspiracy to defraud the United States carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000. Obstructing of IRS laws carries a penalty of not more than 3 years in federal prison, and a fine of up to $250,000. Failing to file a tax return carries a penalty of not more than 1 year in federal prison, and a fine of up to $100,000. Obstruction of justice carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000.
This case was investigated by agents with IRS Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorneys Anna Edgar and Matthew Kirsch.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.