FOR IMMEDIATE RELEASE|
THURSDAY, APRIL 11, 2002
TDD (202) 514-1888
ACCOUNTANTS PLEAD GUILTY TO PARTICIPATION
IN INTERNATIONAL TAX FRAUD SCHEME
WASHINGTON, D.C. – Eileen J. O'Connor, Assistant Attorney General for the Tax Division, and John McKay, United States Attorney for the Western District of Washington, today announced the convictions of Roosevelt L. Drummer and Roy Lentz on charges of conspiring to defraud the Internal Revenue Service, in connection with their work as accountants with Anderson's Ark & Associates. The pleas were entered on October 16, 2001 and July 25, 2001, respectively. The guilty pleas remained sealed until April 11, 2002.
Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division, said, "The defendants were tax return preparers who knew that their clients' tax returns claimed fraudulent refunds. The Department of Justice will continue to work with the IRS to stop promoters of illegal tax schemes from perpetrating schemes that defraud the honest taxpayers who file truthful tax returns."
Drummer and Lentz admitted in their plea agreements that they participated in an illegal tax scheme marketed by Anderson's Ark & Associates. As part of the scheme, the accountants filed income tax returns for clients that claimed refunds of all taxes paid for the current and previous two years. In total, over $100 million in false deductions were reported to the IRS by Anderson's Ark & Associates' clients, according to criminal informations filed in conjunction with the guilty pleas. Both Mr. Drummer and Mr. Lentz have agreed to cooperate in the Government's continuing investigation.
A criminal complaint was filed in the Western District of Washington against Keith E. Anderson on November 19, 2001. The complaint alleges that Anderson's Ark & Associates, an organization founded by Anderson, obtained approximately $28 million in illegal tax refunds for more than 1,500 clients from 1998 to 2001. The complaint also alleges that Anderson's Ark & Associates handled more than $50 million of clients' money.
The complaint further alleges that Anderson's Ark & Associates prepared tax returns that claimed large tax deductions for fraudulent "net operating losses" and "consulting expenses." In reality, the complaint alleges, the funds were not spent as claimed, but instead were wired to Costa Rica so that clients could later withdraw them with a debit card. Anderson and several other defendants also are charged in an indictment returned in the Eastern District of California on May 3, 2001, with conspiring to commit money laundering through Costa Rica. Anderson was apprehended in Costa Rica on February 9, 2002, and is awaiting extradition to the United States.
The tax fraud case is being prosecuted by Tax Division Trial Attorneys Corey J. Smith and Krista Tongring. Additional information about tax fraud schemes to watch out for can be found on the IRS Criminal Investigation website. http://www.ustreas.gov/irs/ci/