Dallas Attorney and Members of Accounting Firm Charged with Promoting Illegal Tax Shelter | OPA

A superseding indictment was returned by a federal grand jury in Dallas today charging a Texas law firm and three co-conspirators with wire fraud, conspiracy to dedicate wire fraud, serving to their purchasers file phony tax returns, and conspiracy to defraud the United States, all primarily based on an illegal tax shelter they promoted and aided apply. Joseph Garza, of Dallas, was earlier charged on Oct. 18. The superseding indictment adds prices towards 3 tax gurus, Kevin McDonnell, James Richardson and Craig Fenton.

In accordance to the authentic indictment, from approximately 2012 to 2021 Garza promoted a tax shelter that allowed higher-earnings clientele to declare fraudulent tax deductions that decreased the taxes they owed to the IRS. Garza and his co-conspirators allegedly directed the customers to transfer funds into shell organizations, then returned this revenue to the consumers, untaxed, for their particular use. To conceal the round movement of funds, Garza and the co-conspirators allegedly commissioned fictitious business valuation stories, established invoices for phony small business charges, and drafted sham contractual agreements.

The superseding indictment alleges that Garza directed clientele to use hand-picked CPAs and other tax specialists, including McDonnell, Richardson and Fenton. McDonnell and Richardson, both CPAs, allegedly owned and operated McDonnell Richardson, P.C., an accounting, tax preparation, and lawful solutions business positioned in Waxahachie. McDonnell allegedly is also a accredited legal professional. Fenton allegedly was employed as a tax manager at McDonnell Richardson.

McDonnell, Richardson and Fenton allegedly assisted Garza operate the illegal tax shelter by planning and submitting fraudulent tax returns for the higher-cash flow shoppers and the shell businesses, among the other entities. The scheme allegedly permitted consumers to conceal $1 billion from the IRS and brought on a whole tax reduction exceeding $200 million.

McDonnell, Richardson and Fenton will all make their first appearances at a later day prior to a U.S. Magistrate Decide of the U.S. District Courtroom for the Northern District of Texas. If convicted, all 4 adult males deal with a greatest penalty of 20 a long time in prison for every single rely of wire fraud, 20 years in jail for conspiracy to dedicate wire fraud, 3 many years in prison for each and every depend of aiding and aiding in the submitting of false tax returns, and five a long time for conspiracy to defraud the United States. A federal district court docket judge will figure out any sentences just after thinking of the U.S. Sentencing Suggestions and other statutory aspects.

Acting Deputy Assistant Lawyer Basic Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Legal professional Chad E. Meacham for the Northern District of Texas made the announcement.

IRS Legal Investigations and the FBI are investigating the scenario.

Assistant U.S. Attorneys Renee Hunter, Katherine Miller and Marty Basu and trial attorney Robert A. Kemins of the Tax Division are prosecuting the scenario.

An indictment is merely an allegation and all defendants are presumed innocent until finally tested guilty over and above a sensible doubt in a court of law.