Qui Tam

Attorney Assisting Offshore Tax Evasion Is Rewarded With Prison Sentence and Judgment to Pay of $2.7 Million

By Finch McCranie, Esq.

As this whistleblower lawyer blog has written about often, abuses of offshore transactions have increasingly become a target of IRS enforcement efforts. A Utah attorney learned this lesson last week when he was sentenced to ten years in prison, and was ordered to pay $2.7 million, for his role in an offshore tax evasion scheme that deprived the government of more than $20 million in taxes.

Attorney Dennis B. Evanson of Sandy, Utah, was convicted of conspiracy to commit mail and wire fraud, tax evasion and assisting in the filing of false tax returns charges. This lawyer used false documentation for fictitious currency transaction losses, false insurance expense deductions and bogus capital losses, all for the purpose of fraudulently offsetting taxable income for clients.

According to the government, the scheme relied in part on offshore companies, offshore bank accounts in the Cayman Islands and Nevis, services of offshore nominees, and opinion letters that purportedly authorized the fraudulent transactions.

Evanson and a co-conspirator received a fee that was typically equal to 30 percent of the tax evaded by his clients.

The conviction followed guilty pleas by another attorney, an accountant, and two certified public accountants, all of whom await sentencing.

"Promoters of elaborate offshore criminal financial schemes for the purpose of committing tax evasion isn't tax planning; it's criminal activity," stated Eileen Mayer, Chief of IRS Criminal Investigations. "Taxpayers should be wary of anyone claiming to be an expert on how to hide income from the IRS."

We commend the IRS and Justice Department for their success in pursuing offshore tax evasion.

Full post as published by Whistleblower Lawyer Blog on August 24, 2008 (boomark / email).