Federal Judge Freezes Eight Bank Accounts in Three States in Shutdown of Tax Evasion Scheme
Computers, Customer Funds, Bank Records Also Seized
WASHINGTON, D.C. - The Justice Department announced today that a federal court in Santa Ana, California, has issued a preliminary injunction order barring the operators of a tax evasion scheme from accessing eight bank accounts at six commercial banks, located in San Diego, San Francisco, San Bernardino, Los Angeles, Las Vegas, and Minneapolis, and giving a court-appointed receiver control over those accounts. The order, entered on August 11, shuts down a tax evasion scheme that falsely promised customers that they could deposit their money with the scheme's operators and thereby legally hide their income, assets, and identities.
The order found that Anthony L. Hargis of Fountain Valley , California operated the scheme-known as a “warehouse bank” scheme, even though it is not a bank-under the name ALH & Co. The court appointed Robert Mosier of Santa Ana as a receiver to take possession of ALH & Co.'s records and assets, including the commercial bank accounts. Mosier this week entered ALH's offices in Fountain Valley and took control of its computers and other records.
The court's order names eight accounts at six commercial banks-four in California , one in Nevada , and one in Minnesota -as subject to the order. The order applies to other banks that might be found to maintain bank accounts for Hargis or ALH.
“So-called warehouse banks that falsely promise ‘financial privacy' are tax scams. Working with the IRS, we have and will continue to shut down these fraudulent operations,” said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division. “We will take appropriate legal action-including criminal prosecution where warranted-against those who operate or participate in them.”
Court papers filed in the case estimated that the scheme's customers identified thus far owe more than $2 million in federal taxes. Hargis has been held in the Santa Ana City Jail since March 15, 2004, after Judge David O. Carter found him in contempt of court for failing to obey an order requiring him to give the IRS his customer list and other records.
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For both promoter and victim, if caught, the price can be high. Those caught using trusts to illegally avoid paying taxes, the government must be paid the original taxes with interest plus fines plus an additional penalty of 75% of the original tax. It is very realistic that, when it's all said and done, the person charged with offshore trust abuse could wind up paying more than twice the original tax.
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