Federal Court Bars Florida Man From Promoting Tax Fraud Scheme Involving LLCs
As discussed here, the Homeland Security and Governmental Affairs permanent subcommittee on investigations recently held hearings on the growing problem of people creating limited liability companies and other businesses as so-called "shell companies" for illegal purposes such as money laundering, bribery, corruption, tax fraud, and for financing terrorist activities. A recent federal case out of Tampa, Florida, illustrates how one man used such companies for tax fraud. In that case, the court barred David Marvin Swanson of Sarasota, Florida, from promoting a tax fraud scheme that involved setting up LLCs in Nevada in order to help his clients hide their income. Swanson had maintained a Web site for his company, Dynamic Monetary Strategies, where he touted his system and distributed a manual that taught clients how to "legally" avoid paying federal income taxes by placing their money in sham trusts, which he called "unincorporated business trust organizations," or "UBTOs." Not surprisingly, Swanson's tax fraud business was only one of many other similar schemes operating throughout the country. Since 2001, the Justice Department's Tax Division has obtained more than 200 injunctions against persons touting fraudulent tax schemes.
To read more about the federal government's case against Swanson, go here, http://www.heraldtribune.com/apps/pbcs.dll/article ?AID=/20061122/BUSINESS/611220534
and here http://www.thesop.org/index.php?id=3084