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FOR IMMEDIATE RELEASE |
Feb. 28, 2008
PROMOTER CONVICTED IN $70 MILLION TAX FRAUD
KANSAS CITY, KAN. – After a six-week trial, the founder of a Topeka-based tax services company accused of tax fraud was found guilty on more than 70 counts including mail fraud, wire fraud, money laundering and conspiracy.
U.S. Attorney Eric Melgren joined with the U.S. Department of Justice’s Tax Division, the Internal Revenue Service and the U.S. Postal Inspection Service to announce the conviction of Michael Craig Cooper, 53, the founder and president of a Topeka-based company called Renaissance-The Tax People.
“Mr. Cooper exploited his customers and attempted to steal from the honest taxpayers of the United States,” said U.S. Attorney Eric Melgren. “Despite all the cunning marketing, Renaissance-The Tax People was only a scam.”
According to evidence introduced at trial, from 1997 until 2002, Cooper and others conspired to defraud the United States and their clients by marketing a program to sell individuals tax deductions through false and misleading representations. Renaissance falsely claimed that its clients could deduct personal expenses, including children’s allowances, commuting miles, educational expenses, and vacations into tax deductible business expenses. This scheme was marketed under the names Renaissance-The Tax People, and Advantage International Marketing (AIM).
In December 2006, Cooper was charged in a superseding indictment with 148 counts including: One count of conspiracy to defraud the United States 56 counts of assisting in the preparation of a false tax return, 36 counts of mail fraud, 11 counts of wire fraud, one count of money laundering conspiracy, and 43 counts of money laundering.
“Citizens who pay their fair share of taxes can rest assured that the Department of Justice will continue to utilize all our resources to prosecute those who choose to cheat and engage in fraud,” said John A. Marrella, Deputy Assistant Attorney General of the Justice Department Tax Division. “To those citizens who choose to engage in tax fraud, our warning is: we are going to prosecute you and do our best to put you in jail.”
U.S. District Court Judge Carlos Murguia set a sentencing date of May 19.
Cooper was convicted on the following counts:
– Count 1: Conspiracy
– Counts 58-61, 66, 68-69, 74, 76, 78-79, 83, 87-88, 91-93: mail fraud.
– Counts 94-104: wire fraud.
– Count 105: money laundering conspiracy.
– Counts 106-146: engaging in unlawful monetary transactions
– Counts 147-148: money laundering.
Not guilty verdicts were returned on the following counts:
– Counts 2-57: preparing false tax returns.
– Counts 62-65, 67, 70-73, 75, 77, 80-82, 84-85, 89-90: mail fraud.
The crimes carry the following penalties:
– Conspiracy: A maximum penalty of 5 years in federal prison
– Mail fraud and wire fraud: A maximum penalty of 5 years on each count
– Conspiracy to commit money laundering and money laundering: A maximum penalty of 20 years on each count.
– Unlawful monetary transactions: A maximum penalty of 10 years.
A hearing will be conducted at a later date regarding forfeiture of $75 million in proceeds from the fraud, including United States currency, real estate, cars, motorcycles and other vehicles, collectible coins, precious metals, bank accounts and life insurance policies.
Three other defendants charged in the indictment – Daniel Joel Gleason, Jesse Ayala Cota and Todd Eugene Strand – pleaded guilty in connection with the case. Gleason, previously the owner and operator of a tax preparation service entitled My Tax Man, pled guilty to conspiracy to defraud the United States and aiding and assisting in the preparation of filing a false tax return on Oct. 10, 2006. Cota, a former Internal Revenue Service District Director for the Southern District of California, pled guilty to conspiracy to defraud the United States on April 26, 2007. Strand, pled guilty on March 27, 2006, to conspiracy to defraud the United States and one count of mail fraud. In his plea, Strand admitted that the conspiracy defrauded Renaissance customers of more than $75 million, and caused a tax loss of more than $20 million.
“Marketing programs to take illegal tax deductions through false and misleading representations isn’t tax planning; it’s criminal activity,” said Eileen Mayer, Chief, IRS Criminal Investigation. “IRS Criminal Investigation has made the investigation of individuals who market or who intentionally buy into abusive tax schemes a national priority. Today’s conviction speaks strongly to our successful efforts in stopping this growing area of fraud.”
"Michael Cooper embarked on a trail of deception by claiming Renaissance, The Tax People, was a multilevel marketing agency when in actuality, it was an illegal pyramid tax scheme," said James D. Vickery, Special Agent in Charge, IRS Criminal Investigation. "Establishing and promoting bad tax advice in the form of a pyramid scheme unfairly shifts the tax burden to honest American taxpayers. IRS-CI is committed to investigating promoters and investors of these abusive tax schemes.
Melgren commended the Internal Revenue Service Criminal Investigation Division, U.S. Postal Inspection Service, Assistant U.S. Attorney Scott C. Rask of the District of Kansas and Tax Division Attorney Charles A. O’Reilly for their work on the case.
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