Thursday, February 6, 2003

Tax evasion scheme alleged

Sham trusts let clients hide income, prosecutors say

By Dan Horn
The Cincinnati Enquirer

Two Greater Cincinnati men were accused in federal court Wednesday of creating a fraudulent tax scheme that has cost the government more than $30 million the past three years.

Authorities say Wilson M. Graham, of Mason, and Homer Richardson, of Loveland, have helped hundreds of clients in 12 states evade federal income taxes.

In a complaint filed in U.S. District Court in Cincinnati, federal prosecutors claim that Graham and Richardson worked together to set up "sham trusts" that allowed clients to hide a significant portion of their incomes.

The complaint states that the clients listed their income on tax returns as being part of business or charitable trusts, which are taxed less than regular income or not at all.

"Graham and Richardson promote abusive trust packages that falsely promise taxpayers that they can legally reduce or eliminate their federal income taxes," the complaint states.

The complaint asks a federal judge to bar the two men from continuing to promote and profit from "abusive trusts."

Neither Graham nor Richardson is charged with a crime, but the complaint indicates that authorities are investigating their activities.

Richardson, a retired estate planner, disputed the accusations Wednesday. "I vehemently deny that I'm involved in any abusive tax shelters," he said. "We have never, ever tried to shield any assets."

Richardson said the IRS has violated its own administrative procedures, and he disputes the agency's authority to enforce the federal statutes cited in the case against him.

He said the IRS is targeting him because he is a party to a lawsuit that claims the agency abuses its power. He said IRS agents raided his business almost two years ago and have repeatedly accused him of wrongdoing.

A spokesman for the U.S. Attorney's Office declined comment Wednesday, and Graham could not be reached for comment.

Prosecutors say Graham sold "sham trust packages" through The Aegis Co. Richardson, the complaint states, was a sales representative for Aegis. Clients were charged fees of up to $875 a month for accounting and tax services related to the sham trusts, prosecutors say.


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