Mich. Tax-Shelter Promoters Indicted
A federal grand jury in Grand Rapids, Mich., returned a five-count indictment charging three tax shelter promoters with conspiring to promote, market and sell fraudulent tax shelters over a 10-year period. Two of the promoters were also charged with the attempted income tax evasion of a Michigan client, who purchased the fraudulent tax shelter.
According to the indictments, beginning in 1995 Peter J. Peggs of Prides Crossing, Mass., and Robert D. Larsen of Winter Park, Colo., were involved in a criminal conspiracy, along with Craig M. Stone, 63, of Fort Pierce, Fla., to defraud the United States by promoting, marketing and selling a fraudulent tax shelter called a loss-of-income (LOI) insurance policy.
Peggs and Larsen, both officers and directors of Security Trust, promoted and sold LOI policies to wealthy clients in order to generate illegal tax deductions. The indictment alleges that Peggs and Larson took steps to conceal from the IRS the fact that these policies were fraudulent. During the duration of the conspiracy, the defendants sold LOI policies for more than $12 million in premiums but directed the premiums, minus their fees, back to the purchasers in a manner concealed from the IRS.
Conspiracy to impede the IRS and tax evasion each carry a maximum punishment of five years imprisonment and a fine of up to $250,000.
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Tags: irs tax fraud, tax fraud, tax shelters
