Shi Corporation (SHCC)

[scion]

Tax evasion deadends in court

By Jacob Hancock
Deseret News
Published: Tuesday, June 30, 2009 8:55 p.m. MDT
http://www.deseretnews.com/article/705314083/Tax-evasion-deadends-in-court.html

A lavish lifestyle in luxury cars, large homes and swanky casinos may have ended for four Salt Lake residents accused of evading and impeding the IRS in a years-long, money-concealing scheme that funneled more than $30 million through its obscure operation.

"Let this case serve as a lesson for those who think they are crafty enough to cheat their way through the (tax) system," said Paul Canacho, special agent in charge of the Nevada IRS field office, whose jurisdiction includes Utah.

Several of the office's 70-man task force slogged through years of bank and credit accounts to track the major financial movements of a "very, very large fraud scheme," Canacho siad.

A 21-page indictment filed in 3rd District Court charges Lester H. Mower, 49; his wife Eva J. Mower, 49; Adrian A. Wilson, 48; and Nathan W. Drage, 50, of underreporting or failing to pay taxes from 1999 to 2006.

The four allegedly guided private companies to merge into publicly traded "shell" companies. Then, using friends and family as nominee pawns, they would control the majority stock, which they personally profited from by selling.

"They did it all to remain one step removed from the money," said Brett Tolman, U.S. Attorney for Utah. "If you sell those, you must share that information. You must report that income."

The Mowers reported about $8,000 in income in 1999, but the IRS says their income was closer to $120,000. And when they reported earning of about $330,000 the next year, the IRS countered with evidence of a joint income of $817,000.

Wilson didn't pay taxes from 2003 to 2005 on about $800,000 total income, the IRS reported.

During those same years, in which Wilson failed to file, he paid off debts to Las Vegas' Monte Carlo Resort and Bellagio Hotel in 13 payments totaling $44,000, according to agents who meticulously tracked individual expenditures for all of the charged individuals.

Other alleged tax-free money among the group included a new $80,000 BMW; a $50,000 sport utility vehicle, along with other vehicle purchases; $30,000 in interior design services; children's private school tuition; and a myriad of high-priced mortgage payments.

Although investigators wouldn't disclose how they discovered the alleged tax evasion process, they say it has taken them "years" to complete.

It appears family and friends who were used as stockholders and account holders will not be charged, Tolman said.

The maximum penalty for conspiracy to impair and impede the IRS is up to five years in prison and a $250,000 fine. Each tax evasion charge is also up to five years, but with a $100,000 fine.

The defendants are expected for an initial court appearance in three weeks.

E-MAIL: [e-mail]

http://www.deseretnews.com/article/705314083/Tax-evasion-deadends-in-court.html