It’s a centennial week for tax news relating to The Centennial State, Colorado. And not in a good way.
This past Monday I wrote about Douglas Bruce. Mr. Bruce, the author of Colorado’s Taxpayer Bill of Rights, was sentenced to 180 days in jail followed by six years probation for tax fraud.
Today we meet William S. Reed, a former Colorado lawyer. Mr. Reed authored the book Bulletproof Asset Protection. You can order a new copy at Amazon.com for as little as $2.73 plus shipping. I’m not suggesting you actually do so, however.
The Las Vegas Review-Journal is reporting Mr. Reed pleaded guilty in federal court earlier this week to the following charges: conspiracy to defraud the United States, aggravated identity theft, and attempted tax evasion.
There’s a cliché that applies in the tax world: If it seems too good to be true, it probably is.
Mr. Reed admitted to his involvement in a scheme that assisted people with concealing their assets and avoiding paying federal income taxes. The scheme surrounded the business Asset Protection Group that he formed in 1998:
Asset Protection Group sold a business opportunity training program to at least 1,000 people for about $10,000 each. Those who purchased the program became consultants and sold the service to clients who wanted to conceal assets. In turn, the consultants received a portion of the fees paid by the clients.
The company’s “asset protection” services included creating domestic corporations and offshore international business companies with obscured ownership.
From 2003 to 2006, Asset Protection Group received over $62 million in withdrawals through one of its bank accounts and shipped over $11 million offshore. Problem was, neither the company nor Mr. Reed or his associates claimed the income.
Indeed, it was too good to be true.
Mr. Reed has agreed to pay over $34 million in restitution to the IRS and nearly $6 million in restitution to the Federal Trade Commission. He also faces up to 12 years in prison, and is scheduled to be sentenced on May 14.
Seems that Mr. Reed’s “bulletproof asset protection” proved quite a bit more penetrable than originally expected.