Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.
Date: 04-16-2024
Case Style:
Case Number:
Judge: Bridget Meehan Brennan
Court: The United States District Ccyourt for the Office of Public Affairs
Plaintiff's Attorney: The United States Attorney’s Office for Washington DC
Defendant's Attorney:
Description:
Ohio Financial Planner Sentenced to Prison for Promoting an Illegal Charitable Contribution Tax Shelter
A financial planner from Cleveland was sentenced to 20 months in prison for conspiring to defraud the United States by promoting an illegal tax shelter scheme involving false charitable deductions.
Rao Garuda was the president and chief executive officer of Associated Concepts Agency Inc. He promoted a fraudulent tax shelter known as the “Ultimate Tax Plan” or the “Advanced Legacy Plan” that was organized, marketed and sold by his co-conspirator, Michael Meyer.
They marketed the scheme as a way for high-income clients to reduce their taxes by claiming deductions for charitable donations that the organizers knew were fraudulent. In particular, Garuda and others promoted the scheme as a way for clients to receive the deduction without relinquishing ownership or control over the assets the clients purported to have donated. Garuda continued to sell the scheme despite being warned by several attorneys that the scheme was illegal.
Garuda also assisted clients in backdating documents so that clients could claim purported donations on their prior years’ tax returns.
In April 2018, the Justice Department filed a civil suit against Meyer seeking to enjoin him from continuing to promote the Ultimate Tax Plan. As part of that litigation, the Justice Department issued civil subpoenas to Garuda’s clients. In response, Garuda created false, backdated documents and directed clients to submit them to the Justice Department. In April 2019, a federal district court permanently enjoined Meyer from organizing, promoting, marketing or selling the Ultimate Tax Plan.
In addition to his prison sentence, U.S. District Judge Bridget Meehan Brennan for the Northern District of Ohio ordered Garuda to serve three years of supervised release and to pay $1,506,399 in restitution.
Cullen Fischel, Associated Concepts’ chief operating officer, was sentenced to four months in prison, three years of supervised release and was ordered to pay $268,605 in restitution for his role in the scheme.
On April 10, Meyer was sentenced to eight years in prison for his role in the scheme.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement.
IRS Criminal Investigation is investigating the case.
Assistant Chief Michael Boteler of the Tax Division and Assistant U.S. Attorney Elliott Morrison for the Northern District of Ohio are prosecuting the case.
Outcome:
Plaintiff's Experts:
Defendant's Experts:
Comments: