carthage surgeon, brother sentenced for $1.6 million tax fraud
SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Carthage, Mo., surgeon and his brother, who worked as his office manager, were sentenced in federal court today for a tax fraud conspiracy in which they attempted to avoid paying federal income taxes on nearly $1.6 million earned by the medical practice.
Brian Keith Ellefsen, 47, and Mark Edward Ellefsen, 41, both of Carthage, were sentenced by U.S. District Judge Greg Kays. Brian Ellefsen was sentenced to 22 months in federal prison without parole and ordered to pay approximately $1.2 million in restitution. Mark Ellefsen was sentenced to 14 months in federal prison without parole and ordered to pay $50,000 in restitution.
On May 15, 2009, Brian and Mark Ellefsen were convicted at trial of all the charges contained in an April 12, 2007, federal indictment. Brian Ellefsen was an orthopedic surgeon who owned and operated a practice called Southwest Missouri Bone and Joint, Inc., located in Carthage. Mark Ellefsen was the office manager of the medical practice.
Brian and Mark Ellefsen diverted approximately $1,567,100 from Southwest Missouri Bone and Joint to Brian Ellefsen, without paying any taxes on the diverted funds, in a conspiracy that lasted from July 10, 1997 to Aug. 10, 2003. The Ellefsens established accounts at several financial institutions in the names of various trusts and offshore bank accounts. They used those accounts and entities to engage in a series of sham paper transactions having no economic substance or business purpose, which resulted in the concealment of funds from the IRS and the attempted illegal reduction or elimination of federal tax liability.
Money diverted and concealed for the benefit of Brian Ellefsen was used to pay for cash withdrawals and charges made on an offshore credit card, payments for personal expenses, payments on loans, expenditures for the construction of his family home, and expenditures for the purchase of another residence located on Table Rock Lake.
They were also found guilty of three separate instances, from 2001 to 2003, in which Brian Ellefsen filed a false income tax return. In each of those three years, Brian Ellefsen received income substantially in excess of the amount reported on his U.S. Individual Income Tax Return.
They were also found guilty of three separate instances, from 2001 to 2003, in which Mark Ellefsen aided and assisted in the preparation of a false income tax return on behalf of Brian Ellefsen.
This case was prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich and Mike Boteler, trial attorney in the Tax Division of the U.S. Department of Justice. It was investigated by IRS-Criminal Investigation.