DENVER – LAWFUEL – The Law News Network – A federal grand jury in Denver has indicted KRIS SMITH, AGE 51, of Grand Junction, Colorado, for filing four false federal income tax returns, in violation of Title 26, United States Code, Section 7206(1), the Department of Justice and Internal Revenue Service (IRS) announced today. According to the indictment, Smith falsely reported zero taxable income on her 1999, 2000, and 2001 personal tax returns that were filed with the IRS, when in fact she earned income in higher amounts. In addition, the indictment alleges that Smith filed a false claim with the IRS seeking more than $70,000 in tax refunds for the years 1997 and 1998, to which she was not entitled. If convicted, Smith faces a maximum sentence of 3 years’ imprisonment and a $100,000 fine for each violation.
Smith was a client of Anderson’s Ark and Associates (AAA) beginning in 1999. AAA was an organization that promoted and sold fraudulent tax shelters and investment scams. From 1996 through 2001, AAA had approximately 1,500 clients, nearly 300 of whom claimed over $120 million in fraudulent income tax deductions. As of this date, 16 AAA clients have been indicted, resulting in 7 guilty pleas and one trial conviction.
In late November—December of 2004, the Justice Department prosecuted 10 AAA promoters and accountants in Seattle, Washington. On December 27, 2004, a jury convicted six defendants: Keith Anderson; Wayne Anderson; Richard Marks; Karolyn Grosnickle; James Moran; and Pamela Moran on charges of conspiracy to defraud the government, mail fraud, wire fraud, money laundering, and aiding and assisting the filing of false tax returns in connection with their promotion and sale of the AAA fraudulent tax schemes. In April 2005, those six defendants were sentenced to lengthy terms of imprisonment ranging from seven to 20 years. The remaining 4 defendants pleaded guilty to various tax charges and were sentenced to up to 2 years in prison. More information about the conviction and sentencing of those AAA defendants may be found on the Tax Division website at http://10.173.2.10/tax/txdv05210.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
This case was investigated by the IRS Criminal Investigation Division and is being prosecuted by Krista Tongring and Greg Bockin, Trial Attorneys, U.S. Department of Justice, Tax Division.
Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation website http://www.ustreas.gov/irs/ci/.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax.