By A.M. Costa Rica wire services
On February 4, United States Attorney Erica H. MacDonald announced the sentencing of an U.S. Citizen surnamed Flynn, 57 years old, to 87 months of federal prison.
Before the sentencing, on June 5, 2018 United States Attorney Gregory G. Brooker announced the guilty plea of Flynn, to one count of conspiracy to defraud the United States and one count of filing a false tax return.
Flynn, who was initially charged on December 21, 2016, pleaded guilty before Senior U.S. District Judge Ann D. Montgomery in Minneapolis, Minnesota.
“ Flynn devised a complex fraud scheme by creating a labyrinth of business entities and layers of obfuscation to hide tens of millions of dollars from the IRS,” said Assistant U.S. Attorney David Maclaughlin.
“ Flynn generated his income using an alias name while hiding behind randomly-named Nevada-based companies titled in the name of his father. Flynn then sent the income he earned in this way to Australia to be held by nominees, and then repatriated the money indirectly, sometimes through Costa Rica. Flynn acknowledged at his plea hearing that he took these steps to defraud the Internal Revenue Service. Flynn’s scheme was animated by his desire to live a luxurious lifestyle unencumbered by income tax liabilities, a desire fulfilled by his purchase of a $2.7 million mansion in Orono with untaxed income repatriated through Costa Rica.” said Maclaughlin.
He was also ordered to pay over $5 million in restitution.
Flynn was sentenced by Senior U.S. District Judge Ann D. Montgomery on January 24, 2019, in Minneapolis, Minnesota.
According to the defendant’s guilty plea and documents filed in court, between 2005 and 2015, Flynn evaded the assessment of millions of dollars in income taxes by fraudulently hiding millions of shares of stock that he obtained for himself.
In 2006 and 2008, Flynn assisted two privately-held Wisconsin-based companies, in becoming publicly traded through stock-for-stock “reverse merger” transactions.
As compensation for Flynn's work, millions of shares of publicly-traded stock in the resulting public companies were transferred to “Integritas, Inc.” and “Diversified Equities Partners,” both of which were controlled by Flynn.
Flynn, who exercised control over the stock, which had considerable value, was required to, but did not, report the receipt of the shares of stock as income on his individual income tax returns.
According to the defendant’s guilty plea and documents filed in court, in order to conceal his control and ownership of the stock, and to evade paying income taxes, Flynn caused a portion of the stock to be put in the names of Australian nominees recruited by Flynn’s co-conspirator.
|
A.M. Costa Rica wire services photo
Mr. Flynn was also ordered to pay over
$5 million in restitution.
The Australian nominees, who never actually owned or controlled the stock, were directed to open brokerage accounts in the United States to receive the shares, but Flynn possessed their login and password data so he could maintain control of the accounts and the shares of stock.
According to the defendant’s guilty plea and documents filed in court, during the course of the conspiracy, when Flynn needed money, he caused the Australian nominees to sell shares of stock and transfer the proceeds to entities in the United States controlled by Flynn, which in turn made payments to Flynn or on his behalf.
These sales generated millions of dollars in income, which Flynn purposely failed to report to the IRS.
For example, in 2007, Flynn received approximately $2.7 million of the proceeds from the Australian nominees to buy a house in Orono, Minnesota, which was considered income to Flynn.
That year, in a tax return Flynn acknowledged was materially false at his guilty plea hearing, Flynn reported only $26,136 of total income.
United States Attorney MacDonald thanked the Criminal Investigation Division of the IRS who investigated the case and Assistant United States Attorneys David J. Maclaughlin and Benjamin F. Langner who prosecuted the case.
More information on this case may be reached at U.S. Department of Justice here.
---------
Have you heard of expats evading taxes because of the bad advice of an attorney? We would like to know your thoughts on this story. Send your comments to: news@amcostarica.com
|
