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'TOWER EXECUTIVE RESOURCES' PROMOTORS SENTENCED

January 20, 2006

The promoters of the "Tower Executive Resources" tax scam are going away for awhile, according to a Justice Department press release. Paul D Harris will serve 5 1/2 years, followed by three years of supevised release. Co-defendant Lestr R. Retherford got a 48-month sentence. The Coloradans scam involved setting up a phony offshore company:

According to the evidence introduced at trial, wealthy taxpayers paid initiation fees of up to $50,000 to join Tower Executive Resources and thousands more in annual fees to maintain their membership. Harris and Retherford set up shell corporations for their clients that were used to conceal nearly $9 million in taxable income. The clients transferred millions of dollars to secret bank accounts in the Turks and Caicos Islands and other foreign countries. These secret bank accounts were titled under the names of International Business Companies (IBC’s) and other nominee entities. Although these IBCs were owned “on paper” by a taxicab driver from the Turks and Caicos Islands, they were actually controlled by the Tower Executive Resources’ clients. The defendants made it appear as though the offshore transfers were payments for consulting services by issuing a series of false invoices to the clients’ businesses, which the clients falsely deducted on their businesses’ tax returns. The Tower Executive Resources clients then used debit cards and bogus loans to bring the money they had transferred offshore back into the United States for their own personal benefit.

An heir to the Bekins Moving business was among the clients. He testified on behalf of the Government and now awaits sentencing by the U.S. District Court in Seattle. The Justice Department release says nine Tower clients have been convicted and three more are under indictment.

The Moral: Tax planners who say you can move your wealth off shore tax-free with deductible expenses, but still keep the money - like Tower Resources and Anderson's Ark - are indictments waiting to happen. Don't touch them with a 10-foot consulting fee.

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