Two Agree to Stop Promoting or Operating Alleged Scheme to Offset Native American Casino Distribution Income
WASHINGTON – LAWFUEL – Law News, Law Jobs Network – A federal judge in Los Angeles has permanently barred Stephen Drake of Prescott, Ariz., and Kenneth Sorenson of Buellton, Calif., from promoting or operating an alleged tax fraud scheme, the Justice Department announced today. Judge Florence-Marie Cooper of the U.S. District Court for the Central District of California signed the civil permanent injunction, which the defendants agreed to without admitting wrongdoing. The order also bars Sorenson, a CPA whose office in is Solvang, Calif., from preparing federal income tax returns for customers based on the alleged tax fraud scheme.
The government alleged in the complaint filed in this case that Drake and Sorenson devised and operated a scheme that helped some members of the Santa Ynez Band of Chumash Indians claim bogus deductions on their federal income tax returns to offset income the members receive from the Band’s casino operations at the Chumash Casino Resort in Santa Ynez, Calif. The complaint also stated that each Band member received over $300,000 in casino distributions in 2004 and over $400,000 last year. More information about the case and a copy of the government complaint are available at http://www.usdoj.gov/tax/txdv06497.htm.
The injunction order requires Drake and Sorenson to mail a copy of the injunction to all customers who participated in the scheme and to any other persons to whom they sold a similar scheme in the past five years.
Since 2001, the Justice Department’s Tax Division has obtained more than 210 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website at
http://www.usdoj.gov/tax/taxpress2006.htm. More information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax.