Wednesday, February 17, 2010
Department of Justice
United States Attorney James R. Dedrick Eastern District of Tennessee
KNOXVILLE AREA COUPLE PLEADS GUILTY TO TAX FRAUD
KNOXVILLE, Tenn -- Brett Edward Dirr, 46, and his wife, Renee Dirr, 52, of Walland, Tennessee, pleaded guilty before U.S. District Judge Thomas W. Phillips to conspiracy to defraud the United States. Both were named in an April 2008, eleven-count indictment charging them with conspiracy to defraud the United States by attempting to impede, impair, obstruct and defeat the collection of income taxes by the Internal Revenue Service (IRS). Additionally, Brett Dirr was charged with five counts of income tax evasion and five counts of failure to file tax returns for calendar years 2001 through 2005. Sentencing for the Dirrs has been set for June 14, 2010, at 2:00 p.m. Each faces a maximum penalty of 5 years in prison and a fine of up to $250,000.
During their plea hearings, the Dirrs admitted that they had conspired to fail to file federal income tax returns to report the income that Brett Dirr had earned. They also admitted to concealing assets by creating a nominee entity known as The Lotus Group and assigning their assets to that nominee entity, thus creating the appearance that they had relinquished ownership and control over their assets, including their residence in Walland, Tennessee and their automobiles. Additionally, the Dirrs purchased a Reliance Defense Package for the purpose of establishing a defense to possible tax prosecution.
Furthermore, Brett Dirr admitted that he signed and provided to his employers documents certifying that he was exempt from tax withholding and stating that he had no obligation to pay income taxes. The Dirrs also admitted that they filed affidavits with various federal, state and local government officials and offices that they were "Natural-born, Free adult Citizens" of the "Indiana Republic" and "California Republic" and therefore not subject to federal income tax laws.
The investigation, which led to the indictment and today’s guilty plea, was conducted by the IRS Criminal Investigation Division. Assistant U.S. Attorneys Charles E. Atchley, Jr., and Frank M. Dale, Jr., represented the United States.