Tampa Business Executives Indicted For Promoting Fraudulent Tax Scheme
Tampa, Florida - United States Attorney Robert E. O'Neill announces the unsealing of an indictment charging Duane Crithfield (65) and Stephen Donaldson, Sr. (67) with one count of conspiracy to defraud the United States. If convicted, each faces a maximum penalty of five years in federal prison and a $250,000 fine.
According to the indictment, from 2001 and up to at least March 2008, Crithfield, Donaldson and others, through Foster & Dunhill, Offshore Trust Service, Fidelity Insurance Company ("FIC"), and Citadel Insurance Company ("CIC") promoted, marketed, and implemented a fraudulent offshore tax strategy known as the Business Protection Plan ("BPP"). The BPP strategy enabled Crithfield and Donaldson’s affluent clients to claim business expense deductions based on sham "insurance premium" payments made to offshore entities FIC and CIC, in amounts intended to substantially reduce the clients' taxable income for a particular year. The so-called insurance premiums were not based on actual business risks, but rather on the client's interest in reducing business income for tax purposes. After obtaining the benefit of a tax deduction on the client's corporate income tax return, the client would later receive approximately 83-85% of the premium back.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Internal Revenue Service Criminal Investigation. It will be prosecuted by Assistant United States Attorneys Jay G. Trezevant and Matthew J. Mueller.