SELF-PROCLAIMED CPA SENTENCED FOR ROLE IN TAX AND INVESTMENT FRAUD SCHEME

Eleventh Defendant Sentenced for Promotion of Scheme

WASHINGTON, D.C. - Lanny R. White of Orem, Utah was sentenced today in a Salt Lake City federal court in connection with the promotion of a tax and investment fraud scheme, the Justice Department and Internal Revenue Service (IRS) announced. U.S. District Judge Ted Stewart sentenced White to 60 months in prison. In addition, White was ordered to pay more than $5 million in restitution and serve three years of supervised release upon the completion of his term of imprisonment. White pleaded guilty to fraud charges in November 2006.

In April 2003, White, David J. Orr, attorneys Todd R. Cannon and Michael Behunin, and Certified Public Accountant (CPA) Max Lloyd were indicted for promoting and selling a fraudulent trust scheme to over 300 clients who defrauded the United States of more than $5 million in tax revenue. In total, 11 individuals have pleaded guilty and have been sentenced to prison in this case, including four attorneys, one CPA, and a former IRS Agent.

“People who hold themselves out as tax professionals and promote tax fraud do more than damage the reputation of honest professionals,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “They harm all honest taxpayers who comply with the tax laws.”

According to the plea agreement, White admitted that from 1993 to 2004, he and his co-conspirators — using the names Advanta Strategies, World Contractual Services, Rockwell Services, CornerStone West, Ventures Limited, and Whiven Financial — marketed and sold a fraudulent trust scheme through seminars, promotional materials, and opinion letters. White and his co-conspirators falsely represented to clients that by placing their businesses and assets into the names of trusts, the clients could lawfully eliminate or substantially reduce their income tax liabilities.

“Concealing income from the government through the use of fraudulent trust arrangements is not financial planning; it’s criminal activity,” said John H. Imhoff, Jr., Acting Chief, IRS Criminal Investigation. “Those who promote these activities will be held accountable.”

White admitted that, as part of his role in the conspiracy, he falsely claimed to be a licensed CPA and used his brother’s CPA license number, without his brother's knowledge. White also admitted to preparing opinion letters that falsely assured the legality of the tax benefits of the fraudulent trust scheme and that he promoted the scheme at offshore seminars hosted by the “Institute of Global Prosperity.” Several individuals associated with Global Prosperity have been convicted of felony tax charges in the Western District of Washington. White acknowledged that his actions, which resulted in the filing of more than 2,000 false and fraudulent federal income and trust tax returns, caused a loss of federal tax revenue totaling between $7 million and $10 million.

Additionally, White acknowledged that he and others conspired to use the U.S. mail and interstate wire communications to obtain over $5 million in cash and property from clients through false and fraudulent misrepresentations. White also admitted to placing clients’ assets in unsound “investments” in international financial markets and other offshore “investing opportunities” that he knew would put the clients’ funds at considerable risk and would never, in fact, pay any return.

More information about the Justice Department’s efforts against income tax evaders can be found at http://www.usdoj.gov/tax/taxpress2007.htm. Information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax.

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