BROWARD MAN CONVICTED IN TAX FRAUD SCHEME
Wifredo A. Ferrer, United states Attorney for the Southern District of Florida, John A. DiCicco, Acting Assistant Attorney General of the Tax Division, and Daniel W. Auer, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation Division, announce that defendant Michael D. Beiter, Jr., of Broward County, has been convicted of tax and other charges. After a six day jury trial, a Fort Lauderdale jury found the defendant guilty of corruptly impeding the IRS, sending fictitious financial instruments to creditors, and helping one of his clients evade federal income tax.
According to court documents and testimony during the trial, Beiter marketed a debt elimination and abusive tax scheme. The scheme was premised on the idea that individuals are “sovereigns” who can “declare their independence” from ordinary obligations, such as paying creditors and federal income taxes. Beiter promoted the sale of abusive tax packages involving purportedly non-taxable “pure trusts.” Beiter sold at least 100 of these packages. One of his clients used his tax elimination package to avoid paying more than $900,000 in federal income tax.
According to evidence presented a trial, the defendant filed tax returns to the IRS for tax years 2004, 2005, and 2006 reporting zero income and taxes, despite the fact that had net taxable income in excess of $1,800,000. Beiter also opened a number of bank and stock trading accounts with bogus taxpayer identification numbers. The evidence at trial also established that Beiter attempted to intimidate IRS employees by contacting them at their homes.
U.S. Attorney Wifredo Ferrer stated, “The U.S. Attorney’s Office is committed to enforcing our nation’s tax laws. Law abiding citizens who pay their fair share of taxes can rest assured that we will prosecute individuals involved in fraudulent tax elimination schemes.”
“The use of abusive trust schemes and fraudulent debt elimination tactics intended to conceal income from the IRS isn’t tax planning; it’s criminal activity,” said Daniel W. Auer, IRS Criminal Investigation. “There is no secret formula that can eliminate a person’s tax obligations. Today’s verdict reinforces our commitment to every American taxpayer that we will identify and prosecute those who promote illegal financial transactions designed to evade the payment of taxes.”
The defendant faces a maximum statutory term of 168 years in prison. Sentencing has been scheduled for January 28, 2011.
Mr. Ferrer commended the investigative efforts of the IRS Criminal Investigation Division agent involved in the case, as well as Assistant U.S. Attorneys Bertha R. Mitrani and John Gonsoulin and Tax Division Trial Attorney Jed Silversmith, who are prosecuting the case.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.