Justice News

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Monday, September 15, 2014

Federal Court Bars Nevada Corporation from Promoting Alleged Tax Scheme

Firm Allegedly Marketed Welfare Benefit Plans that Unlawfully Increased Tax Deductions and Avoided Income Taxes

A federal court has permanently barred Sea Nine Associates Inc.  from promoting and selling an alleged nationwide tax scheme that involved using welfare benefit plans to unlawfully increase and accelerate tax deductions and avoid income taxes, the Justice Department announced today.

On Sept. 12, U.S. District Judge Josephine L. Staton for the Central District of California entered a judgment of permanent injunction against Sea Nine.

According to the complaint, welfare benefit plans permit companies to pool together and make monetary contributions toward the purchase of life insurance for the benefit of each participating company’s employees or principals.  Participants in legitimate welfare benefit plans may be able to deduct their plan contributions as a business expense.  The government alleged that Sea Nine marketed the unlawful welfare benefit plans to more than 200 entities.  The injunction order bars Sea Nine from selling and managing any purported welfare benefit plans.

In the past decade, the department’s Tax Division has obtained more than 500 injunctions to stop tax fraud promoters and tax return preparers.  Information about these cases is available on the department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

United States v. Kenneth Elliott, etc. et al.
Default Judgment and Permanent Injunction Against Sea Nine Associates, Inc.

Component(s): 
Press Release Number: 
14-983
Updated July 7, 2016