Two Sham Trust Marketers And Former Congressional Candidate Sentenced
Peoria, Ill. – Three defendants convicted this summer of tax offenses were sentenced to prison terms this week. Kenton W. Tylman and Debra J. Hills, both of Charleston, Illinois, were convicted in July 2008 for participation in a tax fraud conspiracy that marketed and sold sham trusts and financial packages to shelter taxpayers’ income from the Internal Revenue Service. U.S. District Judge Michael M. Mihm sentenced Tylman to five years in federal prison; Hills was ordered to serve three years in prison. A third defendant, Brent A. Winters, of California, who was acquitted of the conspiracy charge but convicted of filing a false tax return, was ordered to serve 12 months in prison.
“Ultimately, friends and neighbors shoulder the tax burden for those who fail to pay their fair share,” said U.S. Attorney Rodger A. Heaton, Central District of Illinois. “These three deserve and will spend time in federal prison because of their actions. The prosecution and punishment of white-collar crimes, including tax offenses, will remain a high priority of the Department of Justice.”
At sentencing, Judge Mihm determined that Tylman and Hills each committed the offense as part of a pattern or scheme from which they derived a substantial portion of their income. Evidence presented by the government at trial showed that beginning in 1995, Tylman sold “trusts” and related financial arrangements for the Aegis Company in Palos Hills, Illinois. In 1998, Hills joined Tylman in the sale and promotion of the “trusts.” During 1999 and 2000, Tylman and Hills sold “trust” packages using the business names of Worldwide Financial Services and Worldwide Financial and Legal Association. Purchasers of the so-called “trusts” were charged as much as $40,000 for their services. Tylman and Hills received a percentage of the purchase price, as well as commissions and management fees.
Winters, acquitted of the conspiracy, was convicted for filing a false U.S. Individual Income Tax Return for the 1998 tax year. The government presented evidence that Winters, an attorney who made an unsuccessful run for Congress in 1998, loaned $36,616.50 to his campaign fund when he was a candidate for the U.S. House of Representatives. Following his unsuccessful campaign, Winters claimed that he sold the uncollectible loan for $2,500 to “American Land and Mines Company,” a trust controlled by Winters and his wife. Winters then reported a capital loss of $34,117 as a deduction on his tax return; however, the law does not allow for deduction of a bad debt created by the sale to a related party. Further, there was no evidence that American Land and Mines Company ever purchased the loan.
The Criminal Investigation Division of the Internal Revenue Service conducted the investigation. The case was prosecuted by Assistant U.S. Attorneys Hilary W. Frooman and Patrick J. Chesley, both of the Central District of Illinois.
James A. Lewis
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