Jackson, MS – A Florida resident has admitted guilt in a case involving a decade-long scheme promoting an illicit tax shelter and committing wire fraud. The individual also confessed to aiding in the preparation of false tax returns for clients using the shelter.

Stephen T. Mellinger III of Delray Beach worked as a financial advisor, insurance salesman, and securities broker in various states. Since late 2013, he and his accomplices marketed an illegal tax shelter, encouraging clients to claim inappropriate deductions for “royalty payments” to unlawfully minimize their taxes.

Court documents reveal these royalty payments constituted a deceptive money flow, creating the facade of legitimate business expenses. Clients would transfer funds to accounts managed by Mellinger and his partners, who would return the sum—minus their fee—to an account controlled by the client, allowing them to claim false deductions.

Through the scheme, clients claimed over $106 million in misleading tax deductions, leading to a $37 million tax loss for the IRS. Mellinger and one unnamed co-conspirator reportedly earned approximately $3 million from the operations. They also misappropriated over $2.1 million from clients under investigation, some of which M

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