Utah Promoter Jailed In Tax Evasion And Offshore Investment Scam

by Leroy Baker, Tax-News.com, New York

24 August 2006

A Salt Lake City man has been jailed for his role in promoting a tax evasion and offshore investment scam which defrauded the US Treasury of $5 million, the US Department of Justice and the Internal Revenue Service have announced.

Edward T. Woodger is one of eleven individuals who promoted a tax fraud scheme that involved the use of trusts. The other conspirators included four attorneys, a CPA, and a former IRS revenue agent, all of whom have pleaded guilty in the case.

The prosecution continues the five-year crackdown on the promotion of illegal tax evasion schemes by the DoJ, which recently obtained its 200th civil injuction against suspected tax fraudsters.

“People who promote tax evasion schemes harm all honest taxpayers,” stated Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division.

“The Department of Justice continues to vigorously prosecute scam artists who help others evade taxes," she added.

In his plea agreement, Woodger admitted that beginning in 1998, as a salesman of World Contractual Services, he promoted and sold a fraudulent trust scheme designed to evade federal income taxes. According to the DoJ, Woodger told customers that their tax liabilities could be lawfully reduced by placing businesses, homes, investments and other assets into a trust’s name.

Woodger admitted that he and his co-conspirators caused the preparation of more than 2,000 false and fraudulent federal income tax returns that cost the federal Treasury between $2.5 million and $5 million.

Woodger also admitted participating in investment frauds in which he claimed himself to be the "offshore money man." The fraud resulted in customers losing between $2.5 million and $5 million.

Woodger was jailed for 60 months for conspiring to defraud the United States, and to commit mail and wire fraud in connection with the promotion of a tax fraud scheme.

U.S. District Judge Ted Stewart also ordered Woodger to pay restitution of $2,943,865 and to serve three years of supervised release upon the completion of his term of imprisonment.

“Promoting abusive trusts and tax schemes for the purpose of committing tax evasion isn’t tax planning; it’s criminal activity,” said Nancy Jardini, IRS Chief, Criminal Investigations.

“The IRS continues to focus enforcement resources on efforts to shut down fraudulent tax schemes and hold the promoters of these schemes accountable for their actions," she added.

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