Man Pleads Guilty to Corruptly Interfering with Irs Laws
Las Vegas, Nev. – A man who four years ago was permanently barred by a federal district judge from preparing tax returns and promoting a fraudulent tax scheme, pleaded guilty today to a federal criminal charge of interfering with the IRS, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
James A. Dilullo, 65, of Las Vegas, pleaded guilty to one count of corrupt interference with IRS laws. Dilullo faces up to three years in prison and a $250,000 fine, and is scheduled to be sentenced by U.S. District Judge Philip M. Pro on October 3, 2011, at 11:00 a.m.
According to the guilty plea memorandum filed today, from 1994 through the present, Dilullo assisted in promoting and selling trusts and trust packages to persons which fraudulently eliminated taxable income. Dilullo also assisted his clients to prepare false trust and individual income tax returns. Eventually, the IRS began to conduct examinations of the trusts, and in response, Dilullo told his clients that the IRS did not have the authority to investigate their trusts, and that the clients should not accept IRS correspondence, respond to IRS inquiries, or provide any information to the IRS. Dilullo provided his clients with frivolous correspondence to send to the IRS, which challenged the IRS's authority to conduct the examinations. In December 2005, Dilullo filed a lawsuit against an IRS revenue agent for purported harassment, extortion and abuse of due process. Dilullo also sent correspondence to the agent in February 2006 threatening the agent and other IRS employees with criminal action if the agents did not discontinue their examinations or prove to him that their actions were legal.
According to court documents previously filed by the government in the civil case in which Dilullo was permanently barred, Dilullo promoted the tax scheme in California, Colorado, Kansas, Iowa, Nevada, Texas, Washington, and West Virginia. Dilullo charged customers between $1,000 and $2,000, plus an annual fee to participate in the scheme, and it was estimated that the scheme cost the U.S. Treasury over $2.25 million.
The case was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Nicholas D. Dickinson.