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Thursday, October 22, 2009

Virginian Accountant, Attorney and Investment Firm Officer Charged with Conspiracy in Tax Shelter Case

WASHINGTON -- Daryl Haynor, an accountant who was a tax partner at an accounting firm in Tysons Corner, Va., and Jon Flask, an attorney who was a partner at a law firm in Vienna, Va., were indicted today for conspiracy to defraud the Internal Revenue Service (IRS) and for corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, the Justice Department and IRS announced.

Michael Parker, who was the chief operating officer of TransCapital Corporation, a tax-advantaged investments company based in Northen Virginia, was also charged today in a criminal information with conspiracy to defraud the IRS. According to a plea agreement that was also filed today, Parker has agreed to plead guilty to this conspiracy count.

According to the indictment, from 1998 through 2006, Haynor, Flask and Parker marketed and implemented a tax shelter called the "Sale Leaseback of Tenant Improvements Strategy" (SLOTS), which enabled various U.S. corporations to claim tax deductions totaling more than $240 million on corporate income tax returns filed with the IRS. During 2002 through 2004, the IRS audited three U.S. corporations that had claimed losses generated by SLOTS transactions.

The indictment alleges that Haynor, Flask and Parker conspired to impede and impair the IRS by making false and misleading statements to IRS agents and attorneys during these audits. The indictment further alleges that tax opinion letters were issued in connection with SLOTS transactions that omitted material facts and contained false and misleading information.

Additionally, the indictment alleges that Haynor, Flask and Parker concealed certain aspects of the tax shelter transaction from SLOTS clients for the purpose of impeding and impairing the IRS.

According to his plea agreement, Parker admitted that he and others took affirmative steps to conceal, mislead and deceive the IRS by misrepresenting facts concerning SLOTS. Parker further acknowledged that the SLOTS tax shelter and related transactions were themselves nothing more than devices to disguise and conceal mere financing transactions.

If convicted, Haynor and Flask face a maximum sentence of eight years in prison and a $500,000 fine. Parker faces a maximum sentence of five years in prison and a $250,000 fine.

An indictment is merely a formal charge by the grand jury. Defendants are presumed innocent unless and until proven guilty in U.S. district court.

The case is being prosecuted by Justice Department Tax Division Trial Attorneys John E. Sullivan and Joseph A. Rillotta. The case was investigation by IRS-Criminal Investigation.

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.

Press Release Number: 
Updated September 15, 2014