Two Letcher Men Found Guilty Of Tax Crimes
Acting United States Attorney Randolph J. Seiler announced that Theodore “Ted” J. Nelson, Jr., age 67, and his son, Steven A. Nelson, age 45, both of Letcher, South Dakota, were found guilty of tax crimes as a result of a federal jury trial in Sioux Falls, South Dakota. The trial commenced on May 5, 2015, and ended on May 12, 2015.
The Nelsons were indicted by a federal grand jury on April 8, 2015. Ted Nelson was charged with one count of conspiracy to defraud the United States, six counts of failure to file income tax returns, and one count of impeding the Internal Revenue Service. Steven Nelson was charged with one count of conspiracy to defraud the United States, seven counts of failure to file income tax returns, and one count of impeding the Internal Revenue Service.
The conspiracy charge carries a maximum penalty of 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. For failure to file income tax returns, each count carries a maximum penalty of 1 year in custody and/or a $1,000 fine, no supervised release, a $25 special assessment to the Federal Crime Victims Fund, costs of prosecution, and restitution. The impeding count carries a maximum penalty of 3 years in custody and/or a $5,000 fine, 1 year of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
The Nelsons inherited a family farm and business from Ted Nelson’s parents. They planted and sold grain, raised cattle, performed custom work for neighbors, ran hunting/lodging businesses, leased out their land, and sold some of the land.
The Internal Revenue Service placed a lien against Ted Nelson’s real estate in January 2004. After that time, the Nelsons created over 30 trusts, corporations, LLCs, and other entities, in an effort to hide their ownership of the farm and its income. Also in 2004, the Nelsons opened a series of bank accounts with themselves or another person as signors, using false tax identification numbers and Social Security numbers. Steve Nelson filed income tax returns through 1996 and Ted Nelson filed them through 1998, and then both stopped filing.
This case was investigated by the Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorneys John E. Haak and Ann M. Hoffman prosecuted the case.
A presentence investigation was ordered and a sentencing date was set for August 17, 2015. Ted Nelson was remanded to the custody of the U.S. Marshals Service, and Steve Nelson was released pending sentencing.