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Thursday, September 10, 2009

Phoenix Attorney and Accountant Charged in Offshore Tax Shelter Scheme

WASHINGTON – Steven W. Allen, an attorney who operated a legal practice in Mesa, Ariz., and Allen P. Goodmansen, a certified public accountant who operated an accounting practice in Mesa, were indicted Wednesday for conspiracy to defraud the Internal Revenue Service (IRS) and for aiding in the filing of false income tax returns for clients of an offshore tax shelter scheme, the Justice Department and IRS announced. Goodmansen was also charged with knowingly filing a false personal income tax return for tax year 2002.

According to the indictment, from at least 1997 through 2004, Allen, Goodmansen and others participated in a scheme to help clients unlawfully evade the payment of income taxes. Allen set up a series of three offshore trusts for at least eight clients, including Goodmansen and an IRS undercover agent. These trusts were designed to help hide the clients’ income. Allen helped clients hide their ownership of businesses and assets, and income on which they should have paid taxes, by directing the clients to title their businesses or assets in the name of their foreign trust. Allen charged clients between $10,000 and $30,000, to set up the trust package.

The indictment further alleges that, at Allen’s direction, Goodmansen and an unindicted co-conspirator prepared false trust tax returns that fraudulently reported the clients’ income as though the income belonged to the trusts. Goodmansen also prepared personal tax returns for some of the individual clients that omitted the income that had been concealed through the foreign trusts. To conceal the scheme’s origination in Arizona, Allen mailed the false trust tax returns to the IRS from outside the United States. Goodmansen personally used the scheme in 2002 to hide income he earned that should have been reported on his personal income tax return.

Allen was charged with conspiracy and seven counts of aiding or assisting in the filing of a false tax return. If convicted, he faces a maximum sentence of 26 years in prison. Goodmansen was charged with conspiracy, filing a false tax return, and three counts of aiding or assisting in the filing of a false tax return. If convicted, he faces a maximum sentence of 17 years in prison.

An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court.

This case is being prosecuted by Tax Division trial attorneys Monica B. Edelstein and Michael J. Romano and is being investigated by the IRS, Criminal Investigation Division, Phoenix. Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax

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Updated September 15, 2014