RENTON COUPLE PLEADS GUILTY TO TAX FRAUD
Couple Set up Sham Corporations to Conceal Income
DENISE VANCE and FREDERICK VANCE of Renton, Washington, pleaded guilty today in U.S. District Court in Tacoma, Washington, to Income Tax Evasion and Failure to File Tax Returns. When sentenced DENISE VANCE faces a maximum term of imprisonment of 5 years, and FREDERICK VANCE faces up to 2 years.
According to court documents Mr. and Mrs. Vance operated a multi-level marketing entity called Manatech which sold food supplements, vitamins, and ointments through “down-line” sales agents. The VANCEs utilized sham trusts to shield their income. In 2001, the VANCEs entered an agreement with the IRS to cease such activity and pay back taxes. Instead of paying such taxes, the VANCEs merely changed from abusing trusts to creating nominee corporate entities to conceal their personal income. That included using corporate bank accounts for personal expenses, transferring their residence to a nominee, and creating a bogus promissory note and lien against their property to interfere with IRS collection efforts. When confronted by the IRS, the VANCEs challenged the lawfulness of federal taxes and challenged the authority of the IRS to assess and collect taxes. At one point the VANCEs issued a “bond” which declared the U.S. government “incompetent” to levy taxes. In all, the VANCEs evaded and failed to file tax returns for about $320,000 in income taxes. Such taxes have since been paid.
According to the Internal Revenue Service over the last decade an average of one thousand people each year are charged with various federal income tax crimes. In 2006, a total of 1,169 taxpayers were indicted or charged by information with federal tax crimes.
DENISE VANCE and FREDERICK VANCE are scheduled to be sentenced in front of U.S. District Judge Franklin Burgess on September 7, 2007.
This case was investigated by the Internal Revenue Service, Criminal Investigation (IRS-CI), and prosecuted by Assistant United States Attorneys Kurt Hermanns and Robert Westinghouse.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.