Oct.11 , 2006

 

FORMER TAX ADVISER PLEADS GUILTY
TO ROLE IN $84 MILLION RENAISSANCE TAX FRAUD CASE

KANSAS CITY, KAN. – The former tax director of Topeka-based Renaissance, The Tax People, Inc., has pleaded guilty to conspiracy and preparing false tax returns as part of a tax fraud scheme that generated more than $84 million from individuals across the nation.

Daniel Joel Gleason, 58, Franklin, Tenn., pleaded guilty to one count of a multi-pronged conspiracy to defraud the Internal Revenue Service and to defraud Renaissance members through mail and wire fraud, and one count of preparing a fraudulent federal income tax return. He entered the pleas during a hearing Tuesday before U.S. District Judge Carlos Murguia.

“The conspirators offered buyers a so-called ‘tax relief system,’ which was a fraudulent scheme for trying to avoid paying income taxes,” said U.S. Attorney Eric Melgren. “Mr. Gleason appeared in videos and brochures advocating the benefits of the system. In those promotions, he was falsely presented as a tax attorney who taught tax and business classes for lawyers and possessed doctorate and post-doctorate degrees in business and law.”

In his plea, Gleason admitted that in March 1998 he signed a contract to work with Renaissance to provide tax advice to the company’s members, and to represent them before the IRS in defending their tax returns. The company, which had headquarters at 1001 SW Gage Boulevard, Topeka, offered home-based business packages involving tax strategies and tax services. Its advertised services included preparing tax returns, providing advice on tax matters and assisting taxpayers during audits.

As part of the scheme, the company’s clients were urged to increase the number of exemptions they claimed on W-4 forms in order to generate enough savings to pay for purchasing the Tax Relief System. As a result, members claimed excessively high exemptions and had too little tax withheld and found themselves owing substantial taxes at the end of the year, unless return preparers like Gleason prepared false returns on their behalf claiming fraudulent deductions.

From the beginning of the conspiracy through June 1999, when Gleason no longer promoted the Tax Relief System, conspirators defrauded thousands of Renaissance members of approximately $12.5 million through the use of mails and wires to communicate false, fraudulent and misleading information.

Gleason also admitted assisting in the preparation of 56 false income tax returns including a 1999 Form 1040 joint income tax return for a couple that falsely claimed losses of $13,914 and resulted in a tax loss of $3,176. Fraudulent income tax returns that Gleason prepared either falsely inflated or falsely created business deductions for personal living expenses.

Gleason is set for sentencing June 18, 2007. He faces a maximum penalty of 5 years in federal prison and a fine up to $250,000 on the conspiracy charge and a maximum penalty of 3 years in prison and a fine up to $250,000 on the charge of preparing a fraudulent tax return.

Other defendants in the case include:

– Michael Craig Cooper, jury trial set for April 2, 2007.
– Jesse Ayala Cota, jury trial set for April 2, 2007.
– Todd Eugene Strand, jury trial set for April 2, 2007.
– Renaissance, the Tax People, Inc., jury trial set for April 2, 2007.
– Frances Ruth, sentencing set for April 9, 2007.
– Thomas W. Steelman, sentencing set for April 23, 2007
– Alexander Anthony Federico, sentencing set for Feb. 12, 2007.
– Elizabeth Crotts, sentencing set for Nov. 27, 2006.

Melgren commended the Internal Revenue Service - Criminal Investigation, and the United States Postal Inspection Service with assistance from the Kansas Attorney General’s Office for their investigation of the case. He also commended the prosecutors in the case including Assistant U.S. Attorney Scott Rask and Department of Justice Tax Division Attorneys Charles A. O’Reilly and Lea A. Carlisle.

 

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