A federal grand jury in Sherman, Texas, returned an indictment today charging a Texas man with tax evasion and corruptly obstructing the IRS for attempting to evade his personal federal income taxes by, among other things, using an abusive-trust tax shelter. In September, a federal grand jury in Denver charged him with conspiring with others to defraud the United States by promoting nationwide the same abusive-trust tax shelter.
According to the indictment, from 2001 to 2014, Larry Conner, of Frisco, Texas, filed his individual income tax returns but did not pay the income taxes reported due on those returns. Conner allegedly attempted to prevent the IRS from collecting the unpaid taxes by creating sham trusts to hide over $5 million in income he earned from 2016 through 2021 and other assets from the IRS. Conner allegedly signed trust instruments purporting to create five trusts and opened bank accounts in the name of each trust, which he used to pay for personal living expenses. The indictment alleges that Conner assigned virtually all his income to the sham trusts and filed false individual income tax returns that did not report the income he assigned to those sham trusts.
The indictment further alleges that in 2018, Conner submitted a false form to the IRS as part of an offer to settle a portion of his tax debt. In the form, Conner allegedly understated his assets, omitted multiple bank accounts and falsely represented to the IRS that he did not run a business.
If convicted, Conner faces a maximum penalty of five years in prison for each count of tax evasion and three years in prison for corruptly obstructing the IRS. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The pending Denver federal indictment charges Conner with conspiring to defraud the United States by promoting nationwide the same abusive-trust tax shelter that he allegedly used to evade his personal taxes as charged in today’s indictment. In that matter, Conner is alleged to have promoted and sold the abusive-trust tax shelter for approximately $25,000 to $50,000 per client, assuring them that they would continue to benefit from and control the income assigned to the sham trusts. In total, Conner’s promotion and sale of the tax shelter allegedly resulted in tens of millions of dollars in unpaid federal income taxes.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys Amanda R. Scott and Lauren K. Pope and Senior Litigation Counsel Corey J. Smith of the Tax Division are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.