Sam Penrod ReportingLoren Washburn, US Attorney's Office: "The fraud scheme cost the United States government more than twenty million dollars."
It may be one of the biggest tax fraud cases in Utah's history, and three Utahns are accused of helping 75 taxpayers cheat the federal government.
Six men, including three from the Wasatch Front, are accused of running the scheme. Prosecutors say they offered to reduce the tax bill of 75 clients, charging them a percentage in what they saved in taxes they would have paid to the IRS.
This scheme was detected by the IRS several years ago, but it has been a complicated investigation that took investigators to several businesses overseas, that the federal government says were used to provide bogus tax shelters for many taxpayers here in Utah.
Everyone is always looking for a tax break and there are many legal tax shelters available. But now this federal indictment accuses three Utahns of devising a scheme that helped themselves and 75 other taxpayers defraud the IRS out of more than 20 million dollars.
Loren Washburn, Assistant United States Attorney: "These clients took deductions for their tax returns that they weren't entitled to take. Those were based on those bogus expenditures that were created through the scheme by promoters of the scheme."
Forty-nine year old Dennis Evanson of Sandy, 54-year old Stephen Petersen of Coalville, and 54-year old Brent Metcalf of Cottonwood, along with three men out of state, were indicted for using false business losses, fake insurance expenses and other fictitious losses to offset the taxable income of wealthy people who were looking to save on taxes.
Loren Washburn, Assistant United States Attorney: "There was a starting fee of 19,700 dollars, in addition to the fees they paid, were computed as a percentage of the tax savings, in most cases and in order to justify those fee's you'd have to have a substantial amount of income."
The 75 clients are being investigated, but so far have not been criminally charged, although the government believes they knew something illegal was going on. Prosecutors say Evanson led the scheme and pocketed three million dollars from it.
Loren Washburn, Assistant United States Attorney: "The IRS has traced the money of these ill gotten gains that they got through these fees for this scheme to a number of properties that they purchased."
The attorney for Dennis Evanson says that the indictment misstates many facts that are critical in the case. All of the men will appear here in federal court over the next few weeks to answer to the charges.