(COMTEX) B: IRS Charges Offshore-Banking Expert
B: IRS Charges Offshore-Banking Expert
PORTLAND, Ore., Apr 25, 2003 (AP Online via COMTEX) -- The author of books on
avoiding taxes was indicted on charges of conspiring to help clients cheat the
Internal Revenue Service by routing millions of dollars to offshore banks.
The federal indictment alleges that Terry L. Neal and three others - his
son-in-law Lee E. Morgan, Aaron Young and James Fontano - had promoted and sold
various tax-evasion schemes since 1995.
Their customers may also face charges, said assistant U.S. attorney Robert Ross.
"We are aggressively investigating and prosecuting all the clients," Ross said.
"These people are successful professional people, successful enough to be
putting $300,000 to $400,000 into these offshore accounts."
Neal, whose books include "The Offshore Advantage," is a high-profile advocate
of offshore asset-protection strategies.
The indictment, issued Thursday, alleges that he and the other three set up sham
corporations both offshore and domestically for their clients. With the
defendants' help, clients allegedly could route money through the sham
businesses and then back to themselves to elude the IRS, the indictment says.
The tax agency launched a crackdown of offshore scams in January.
In earlier testimony in federal court in Portland, IRS Special Agent Craig
Walker said Neal funneled about $115 million through a Canadian bank account in
1998 and 1999 alone. After Canadian authorities froze that account, he moved his
operations to the Caribbean island of Nevis, according to Ross, who is
prosecuting the case.
Neal has a history of run-ins with federal regulators.
In 1999, the Securities and Exchange Commission accused him, his former company
Itex Corp., and three other former Itex employees of securities fraud. Neal
agreed to pay $2.5 million to settle the case, but has yet to come up with the
full sum, Ross said.
Neal was also arrested in December on tax evasion charges; a trial on those
charges was set for May.
The grand jury also charged Neal and Morgan with filing false tax returns and
Neal, Morgan and Young with aiding or assisting the filing of false tax returns.
Neal, Morgan and Young are from the Portland area. The federal grand jury
indictment says Fontano lives in Nevada, where he heads Privatech Group, a
company he owns with Young and Morgan.
In another tax case involving a different author, a federal judge in Las Vegas
has ordered a man who claims that tax paying is voluntary in the United States
to stop selling his book and giving seminars.
Irwin Schiff, who wrote "The Federal Mafia: How It Illegally Imposes and
Unlawfully Collects Income Taxes," says the judge's temporary order violates his
First Amendment rights.
The Department of Justice says Schiff had 3,100 clients attempting to evade $56
million in taxes and calls Schiff's work one of the largest tax scams in U.S.
history.
Copyright 2003 Associated Press, All rights reserved
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APO Priority=r
APO Category=1310
KEYWORD: PORTLAND, Ore.
SUBJECT CODE: 1310
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