RENTON COUPLE SENTENCED FOR TAX FRAUD
Couple Set up Sham Corporations to Conceal Income
DENISE VANCE and FREDERICK VANCE of Renton, Washington, were sentenced today in U.S. District Court in Tacoma, Washington, for Income Tax Evasion and Failure to File Tax Returns. Both were sentenced to 30 days in jail, to be followed by 120 days of home detention.
At sentencing U.S. District Judge Franklin D. Burgess noted that their tax protestor tactics were motivated by greed.
According to court documents, DENISE and FREDERICK VANCE operated a multi-level marketing entity called Manatech which sold food supplements, vitamins, and ointments through “down-line” sales agents. The couple 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 couple 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 $300,000 in income taxes. Such taxes have since been paid and back tax returns have been filed. That circumstance, as stated by Judge Burgess, is an indication of remorse and distinguishes these defendants from more aggressive tax protestors.
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.
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.