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Protestors > EXHIBIT:
Constitutional/Pure Trusts
NEW! -- United States v. Peter Anthony Bond
Jutice
Department Sues to Shut Down Alleged Tax Scams
California
Attorneys Plead Guilty to Promoting Tax Fraud Scheme in Utah
Aegis
Trust Principals and Others Indicted in $68 Million Tax Fraud Conspiracy
Following Nationwide Undercover Investigation
Defendant
Sentenced for Role in Tax Evasion Scheme
Common aliases by scam artists who sell these:
Pure Trusts -- Patriot Trusts -- Contract Trusts -- Freedom
Trusts -- Business Trust -- Unincorporated Business Trust -- Equipment
Trust -- Service Trust -- Final Trust -- Common Law Trust Organizations
(COLATOS) -- Foreign Common Law Trust Organizations (FORCOLATOS)
-- GPG Trust -- Complex Trust System
In 1996, the IRS didn't have
any convictions in this area. By 1999, the agency had scored 35,
and in 2000, it added 52 more.Courts treat these cases seriously.
In November, John Modena of Michigan was sentenced to 5 years
in prison for promoting ''sham'' trusts. His clients, five members
of the Russell family, each got jail sentences, as well.Adds Dale
Hart, an IRS deputy commissioner: ''We don't lose these cases.
The legal history is that these are shams. This is a slam-dunk
when we get to court.''
Source Article: IRS puts spotlight on willful tax evaders -
Criminal investigation division reduces focus on narcotics cases,
by Greg Farrell of USA Today, 27 January 2000
On February 23, 2001, the New York
Times reported that a California couple were convicted of helping
their clients evade $13.8 million in federal income taxes by using
Pure Trusts.
- Dorothy Henderson, 56, got
11 years in prison.
- George Henderson, 59, got 6
and 1/2 years in prison.The federal courts have abolished
parol, meaning that Mrs. Henderson, for example, will spend
AT LEAST eight years in prison.The Hendersons in their defense
asserted the typical "tax protestor" arguments,
such as that income couldn't be defined and that Section 861
excludes most Americans for taxes. The judge thought these
arguments were so good that he gave Mr. Henderson an extra
8 months prison time.According to Mrs. Henderson's lawyer:
"She wouldn't listen [to reason]. She insisted on speaking
and telling the judge about the 861 position and how as a
sovereign citizen of California the federal courts had no
jurisdiction and all sorts of gibberish." For her efforts,
Mrs. Henderson got an extra five months.
Source Article: California couple sentenced for helping clients
evade taxes, by David Cay Johnston of The New York Times, 23
February 2001, Article
Generally
We call these things "Con-Trusts" for short, because
that's just what they are: a pure con for the misguided and the
naive. No legitimate US or state court will recognize them, period
the end. The are a nothing, a non sequitur, a joke. Are
we getting our point across here? Well, to properly illustrate
let's look at their record of successes:
# of Wins by Constitutional Trusts / Pure
Trusts |
# of Wins |
versus Creditors
(in any state of any type) |
0 |
versus the IRS |
0 |
versus Ex-Spouses
in divorce proceedings |
0 |
versus Anybody for Anything |
0 |
|
===== |
TOTAL NUMBER OF WINS |
0 |
Pretty impressive record, huh? Thousands of these things have
been sold for the last 5 years, and yet they haven't had a single
win. Is this something you really want to protect your worldly
goods behind? We would call these things the New Orleans Saints
of asset protection, but at least the Saints win sometimes.Well,
then, how about their record for saving taxes? It is every bit
as impressive:
Type of Tax |
Total Tax
Money Saved |
Income Taxes |
$0 |
Estate Taxes & Probate Taxes |
$0 |
Property Taxes |
$0 |
Other Taxes |
$0 |
|
===== |
TOTAL TAX MONEY SAVED |
$0 |
Actually, this chart is somewhat misleading, because not only
have they not save any money in taxes ever,
but those who have attempted to assert Pure Trusts or Constitutional
Trusts as a defense to tax liability have usually ended up being
sanctioned and fined by the IRS and the Courts. So, really, to
make this an accurate chart, the "Total Tax Money Saved"
should be a NEGATIVE figure -- we just haven't had the time to
figure up how many thousands of dollars in sanctions and fines
(not to mention defense fees and the suffering of families when
the family breadwinner went to the penitentiary) which have resulted
from Pure Trusts and Constitutional Trusts.O.K., so they don't
protect you against anybody, and they don't save you any taxes.
Then why in the world would anybody buy one of these things? The
answer is simple: Because they are suckers.Don't believe us? Then
see below for A BUNCH of cases where "Pure Trusts" were
annihilated in court.
Read
IRS-CID Warning on Abusive Trusts The Idiotic Sham Basis
Behind This Fraud
These are variously hawked as "Pure Trusts", "Patriot
Trusts", "Freedom Trusts", and "Constitutional
Trusts" -- but we simply call them "Con-Trusts"
as that is a doubly-apt term, as it refers as accurately to the
typical character of the sellers as it does to the theory behind
them.Con-Trusts are premised on the clause in the U.S. Constitution
which says, essentially, that no state shall impair the
"obligation of contracts". It is then argued that because
this is in the Constitution, any contract which you make is absolutely
unassailable, never mind that no modern court decision has upheld
the clause in such a fashion, any more than the courts have protected
child pornography under the 1st Amendment. The argument is, essentially,
that if you contract to do it, no matter what it is, it absolutely
cannot be broken. For example, if you and I decide to rob a bank
and enter into a contract to do that, we can then go rob the bank
and there is nothing the state can do about it. This is, as you
can see, logical diarrhea and these arguments do not stand up
any more in the real world than the arguments of those who claim
that. Second, and this is where it is interesting, there are actually
court cases and IRS rulings which hold that these Constitutional
and Pure Trusts do not pay taxes! This, correctly, is what the
promoters tell you; trouble is they don't tell you why. The reason
Constitutional or Pure Trusts do not pay taxes is because they
have been adjudged to be nothings: that is, they don't exist.
Therefore, correctly, Constitutional or Pure Trusts do
not pay taxes, because taxes are paid by the persons creating
them under their own income tax. In other words, if you convey
property or income to a Constitutional or Pure Trust, the Courts
and the IRS will simply treat that property or income as if it
had never been given away in the first place, and you have to
pay taxes on it just like you would have in the first place.The
same holds true for asset protection: Because these trusts don't
legally exist, you haven't really transferred anything to them
and so you still own everything, creating a convenient target
for your creditor's collection efforts.So, if they don't provide
any tax benefits at all, nor do they provide any asset protection
at all, why are they created? Money. They are a scam to
separate fools from their money. The bad thing is that
there have actually been people buy these things (something else
we can't understand since even if you believed in them they would
be easy enough to form yourself without paying someone to do it),
who think they have protection and are getting tax benefits,
when they have simply dug themselves into probably another hole.Don't
expect a real court or the IRS to give these things any more than
a chuckle. But if you want these Constitutional or Pure Trusts
to hold up, you better get an agreement from the IRS or your creditors
that they will litigate any controversies before a posse comitatus in a trailer home somewhere, because no legitimate tribunal will
recognize them. So, if you're going to hide behind a Con-Trust,
you better have your little cabin in the mountains sand-bagged
and your bullets ready (don't forget your cigarettes: remember
that the shortage of those and no TV is what caused the rugged
Montana Freemen to give up), because these things aren't going
to do anything except monetarily benefit the people who sell them. See also Anti-IRS
Theories
The Letter
The scam artists who hawk pure trusts will almost always pull
out the following letter as "proof" that pure trusts
can shelter income:
Please note that the letter states that a "Pure Trust organization
has no tax requirements." It does NOT say that income
to the Pure Trust is not taxable. It does NOT say that income earned
by a Pure Trust can be retained in the Pure Trust. It does NOT even
say if a Pure Trust exists!What the IRS doesn't explain in this
letter is that the IRS treats Pure Trust organizations as if they
do not exist, and that the individuals who are involved with it
are themselves responsible for the tax. In other words, if you transfer
your business earnings to a Pure Trust organization and it makes
$100,000 in a year, then YOU (and NOT the Pure Trust) are responsible
for paying taxes on the $100,000. If you do not pay the tax on
any income or other taxable activity within the Pure Trust then
you are committing criminal tax evasion! Anyone who claims differently
is a liar and a scam artist.Additionally, please note that private
letters, such as the one given above, do not have either precedent
or evidentiary value -- i.e., you cannot introduce the above
letter in court to prove that you are not guilty of criminal tax
evasion.The Upshot: Anybody who presents this letter to you as "proof"
that no taxes have to be paid for these entities is either a scam
artist or is incredibly ignorant.What does the IRS really say about these trusts? Read below.
IRS Warnings
The U.S. Internal Revenue Service has repeatedly warned
about these types of trusts (and, despite promoter's claims, the
IRS has NEVER lost a case against the so-called Constitutional Trust
or Pure Trust), so if you get caught using one you're either going
have to shoot it out with the Service, flee the country, or -- more
likely -- pay hefty fines and perhaps spend some time in the joint
for tax evasion.See IRS
Warnings About Fraudulent and Abusive TrustsSee IRS-CID
Warning on Abusive Trusts
Other Lies About Pure Trusts and Constitutional
Trusts
The scammers who sell these things make all sorts of misleading,
and often bizarre claims regarding purpose trust. For instance:
- That the "ultra-wealthy" use Pure Trusts.
This is a lie. No "ultra-wealthy" anywhere use Pure
Trusts. Reason #1: As shown above, the IRS doesn't recognize
them, so there are no possible tax benefits from using a Pure
Trust. Reason #2: No other courts recognize them, either, so
they provide no asset protection advantages. Let's look at a
couple of the "ultra-wealthy": Bill Gates and Warren
Buffett -- The two richest men in America. Do either of them
use a Pure Trust? Hell no. Bill Gates simply owns a bunch of
Microsoft stock in his own name, and Warren Buffett
simply owns a bunch of Berkshire Hathaway stock in his own
name. Proof? Call these two companies and ask for their
10-K filings.Wanna have some fun with the scammers? Tell them
that you are amazed that they have copies of the trusts
of the "ultra-wealthy", AND THAT YOU'D LIKE TO SEE
THEM!
- That Texaco and a few other companies are organized
as Pure Trusts.
This is another lie. Texaco is a corporation, and its shares (and not trust units) are traded on the New York Stock Exchange.
The fact that these scam artists are so dumb that they would
make such a claim speaks volumes. Apparently, somewhere in the
past, Texaco either won or lost an antitrust suit, and so the
losers who sell Pure Trusts then concluded that Texaco was a
trust. This is somewhat akin to the lady who called me up in
my younger years when I was an antitrust litigation attorney,
and wanted me to handle her divorce. I told her that I didn't
do domestic relations work, and asked her why she had called
me in the first place. She replied that she saw that I was an
antitrust attorney -- and that she "sure as hell didn't trust her husband!"
- That the Rockefellers, Astors, and other ultra-wealthy
families were organized as Pure Trusts.
This is both a lie and misleading. In the past, the wealthy
families often organized themselves as proper trusts under state
trust laws. They did not organize themselves as "Pure
Trusts" under the mythical theories advanced by today's
scam artists. Additionally, the laws have since changed! Even assuming that it was possible to create a Pure Trust around
the turn of the century (it wasn't), the existing Internal Revenue
Code has completely obliterated any possible benefits from using
such a trust. This is a point that the scam artists can't quite
get through their seedy little heads: Laws change. Geez -- It
used to be lawful to keep blacks as slaves, the Senate was elected
by the state legislatures, and it was unconstitutional to sell
liquor anywhere -- but these laws changed too. Indeed, most
of the authorities which relate to the so-called Pure Trust
are from before ratification of the 16th Amendment, which allows
for the individual income tax.
Cases! Cases!
Visit any of the sites which hawk Pure Trusts and/or Constitutional
Trusts and you're likely to see a long list of "authorities"
-- a couple of pages long and two- or three-hundred cites relating
to "Pure Trusts" and such. Don't be misled by these --
they are NOT authority for, really, anything. What they are is a
strange hodgepodge of court cases which seem to relate to "Pure
Trusts", but almost all of which are taken out of context.Many
of these authorities consider situations where the court was faced
with a business entity which was half-partnership and half-trust,
or half-corporation and half-trust, i.e., so called "hybrid"
entities. To distinguish these from entities which are 100% partnership,
corporation or trust, the courts used language such as "that
is a 'pure' trust" for the non-hybrid entities. This would
be like the court comparing a bucket of water & oil with a bucket
of water and saying that the bucket of water & oil is different
from the bucket of "pure" water. Does that mean that there
is a difference between "pure" water and water? Of course
not -- and it is ridiculous to assert such a thing. But that is
exactly what the scam artists have done to create a "pure"
trust.Moreover, going through the pure trust and constitutional
trust websites, you see quite a few authorities from the turn of
the century, but very, very few cases from the last 25 years, and
almost no cases from the last decade. This is because, additionally,
the laws have changed to make trusts overall (and not any particular
breed of trust) less attractive for any planning purposes. As discussed
above, even if you could create a pure trust or constitutional trust
(you can't), it wouldn't give you ANY benefit because the Internal
Revenue Code has obliterated any possibly tax benefit from using
them, and no state court will recognize them for asset protection
purposes.Which brings me to my point: What's the use of even arguing
about these authorities when no court will recognize them. The scam
artist might argue until he is blue in the face and convince you
that there might be a thing called a pure trust or a constitutional
trust, but what's the point of having one if no court will recognize
them? So, how do you deal with the scam artists who sell these?
Easy:THE BOTTOM LINE: ASK THE SCAM ARTIST WHO IS TRYING
TO SELL YOU A PURE TRUST OR CONSTITUTIONAL TRUST TO GET YOU AN IRS
DETERMINATION LETTER STATING THAT THE TRUST WILL GIVE YOU THE TAX
BENEFITS THE SCAMMER IS PROMISING YOU. OR, MAKE HIM GET YOU A LEGAL
OPINION LETTER FROM ONE OF THE BIG 5 ACCOUNTING FIRMS. IF HE CAN'T
GET YOU ONE OF THOSE, YOU CAN ACCURATELY JUDGE THE LEGITIMACY OF
THE TRUST HE IS TRYING TO SELL YOU (WHICH IS NONE).
If you are approached about setting up a
"Pure Trust" or "Constitutional Trust"
Do the rest of us a BIG favor. Contact the following:
If you don't alert the scammers that you have contacted these authorities,
you might be able to help them "sting" the scammers, and
at least then prevent other people from being hurt by this scam.
If you have been scammed into forming a
"Pure Trust" or "Constitutional Trust"
(or "Business Trust" as described in the IRS warning,
etc.)
Contact your local tax attorney immediately (be careful
about going to a CPA because you communications might not be protected
by an effective privilege, and now you are in a possible criminal
circumstance).
IRS Victorious Against Pure Trust Promoters And
Users
Against the "trusts that the U.S. government are afraid to
take to court" (according to the Pure Trust sellers' BS), the
Internal Revenue Service in the year 2000 has had an impressive
and unbeaten string of victories. Read the following article:
The crackdown on abusive trust schemes by the IRS's Criminal
Investigation Division and the Justice Department produced 28
convictions in the first 11 months of fiscal 2000, Mark E. Matthews,
chief of the IRS's criminal investigation division, told Tax Analysts. The IRS first identified abusive foreign and domestic trust
schemes as an emerging area of concern in 1996. The criminal investigation
division's enforcement strategy focuses primarily on promoters
and clients who have willfully used the promotion to egregiously
evade tax. Because of the design and inherent complexity
of the schemes, it typically takes the IRS's criminal investigation
division two years to fully develop its cases. But by the end
of fiscal 1999 the division's work on abusive trusts had produced
35 indictments. "We are seeing results in the courtroom
now that show we recognize the problem with abusive trusts and
that we are actively taking steps to address this area,"
Matthews said. One of the more dramatic convictions came
last week in a September 26 verdict against a California couple
who operated amassive trust scam that enlisted about 300 wealthy
professionals. The convictions of Dorothy Henderson and her husband
George Henderson followed a two-week jury trial in Sacramento
before U.S. District Court Judge Garland E. Burrell. The
Hendersons were convicted of conspiracy to defraud the IRS and
three counts of aiding in the presentation of false tax returns
by their clients to the IRS. Dorothy Henderson was also convicted
of two counts of perjury. Under federal sentencing guidelines
each of the Hendersons could be sentenced to more than nine years
in prison. Both were immediately remanded into custody following
the verdict. "The message should be clear: the IRS
will aggressively pursue those who are promoting illegal and abusive
trust schemes," said Dwight J. Sparlin, the special agent
in charge of the IRS Criminal Investigation Division in Northern
California. According to Assistant U.S. Attorney Benjamin
B. Wagner, from 1993 through 1998 the Hendersons sold packages
of bogus trusts through an entity and advised their clients on
how to use the trusts to generate fraudulent tax deductions. The
clients would transfer their businesses, homes, and other assets
into the trusts, but according to Wagner, evidence at trial established
that the clients - - who were appointed managers of the trusts
-- in fact continued to control their assets. On their
returns the clients claimed various personal expenses, including
items such as home repairs, lawn care, and house cleaning as deductible
expenses of the trusts. They also deducted all mortgage payments
and depreciated the value of their residences, frequently passing
these losses from the trusts onto their personal tax returns.
That resulted in negative income and, in keeping with the scheme,
allowed clients who made more than $150,000 to claim the earned
income credit. Evidence at trial also showed the Hendersons
operated a scheme for high-income clients that concealed additional
income from the IRS by passing client income through a series
of bank accounts in both the United States and in tax havens in
the Caribbean. The funds flowed through accounts controlled by
the Hendersons and ultimately were transferred back to the clients
-- after the Hendersons took their 5 percent fee. On their returns
the clients took deductions for the distribution of the funds
to offshore entities, but didn't report the return of the funds.
During the trial an IRS special agent testified to tracking more
than $1 million in client funds that had flowed through the series
of accounts. The Hendersons resisted IRS efforts to audit
the trusts, refused to comply with IRS summonses, and covered
their tracks by using cashier checks to transfer funds and by
breaking up the funds returning from offshore accounts into numerous
smaller accounts. The evidence at trial also established that
the Hendersons earned more than $1 million in fees from clients,
while marketing the scheme during the period from 1994 through
early 1998. During that time the Hendersons filed no returns and
paid no taxes. Also last week, U.S. District Court Judge
Robert Holmes Bell sentenced a Michigan dentist to 27 months in
prison for willfully evading taxes on $1 million in income by
funneling it through sham trusts and failing to report the income
to the IRS. Lyle Hotchkiss funneled the money through the bogus
trusts during the period from 1994 to 1996. He was also convicted
of failing to file a return for 1993, after earning $550,821 that
year. At the September 27 sentencing, the judge ordered
Hotchkiss -- a self-described former tax resister -- to buy a
full page ad in The Grand Rapids Press featuring his photo with
an admission of guilt and a note urging readers to pay their taxes.
Earlier this year the newspaper quoted Hotchkiss predicting he
would beat the IRS, and promising to bring "enlightenment
and benefit to all."
Pure Trust Promoters
Some of the groups that promote the Pure Trust scam (Our
friends in law enforcement please take note!). A few of these people
are just too stupid to know what they are selling, and the rest
are pure scam artists:
-
4 Your Success Group, Address Unknown, Phone Unknown, http://www.incometaxfreedom.com/ Website Taken
Down!
-
Allison Research Foundation, 713 Burma Dr.NE, Albuquerque,
NM 87123, Phone Listed as 505-296-6252, link Website Taken
Down!
-
Alpha Services, 1926 Contra Costa Blvd. #204 Pleasant
Hill, CA 94523, No Phone Listed, http://www.jpar.net Website Taken
Down!
-
American Beauty Rose, PO Box 560 Yelm, Wa. 98597, Phone
Listed as 360-894-3218, http://www.yelmtel.com/~trusts/ Website Taken
Down!
-
American Freedom (sell "Liberty Pure Trusts"),
Address Unknown, Phone Listed at 507-289-2723, link Website Taken
Down!
-
American Legacy Resources, P.O. Box 2299, Gilbert, AZ
85299, Phone Listed as 602-926-8665, link Website Taken
Down!
-
American Sovereign, The, Freedom Bound International,
c/o 3939 South Sixth Street #138, Klamath Falls, OR, Phone Listed
as 888-878-8436 / 1-661-725-2411 (international) , http://americansovereign.com/trust.htm
-
Apollo Publishing International, P.O. Box 1937, Port
Orchard, WA 98366, Phone Listed as 360-876-5362, link Website Taken
Down!
- http://www.assetpro.us -- Offers the "Federal Contract Trust" which is
simply a re-packaged Pure Trust scam. Very cheesy website, and
they charge an absurd $4,995 for a type of trust that doesn't
even exist! | link
Claims to be run by Richard Young, 2915 W.
Charleston Blvd., #7, Las Vegas,
Nevada 89102, Ph: 702-383-6566 (Toll Free 1-800-330-3140). Hint:
If we know
about this group, so does the IRS and the conviction rate for
those using Pure Trusts (whether titled "Federal Contract
Trust" or otherwise) is 100%
-
BizNet Equity Management Trust, 6030 Barranco Avenue,
Port St. John, FL 32927, Phone Listed as 407-636-1235, http://www.bemt.com/ -Now
a Porn Site!-
-
Christopher Financial & Marketing Group WW., 8030
E. Lakeside Pkwy. #4106, Tucson, Az. 85730, Phone Listed as
520-513-1664, http://www.angelfire.com/biz/
superiorpromotion/ puretrust.html Website
Taken Down!
-
Compass Company NW, Address Unknown, Phone Listed as
888-869-4973, link
-
Entrepreneur Holdings Management Trust, International
Division - PMB 327, 2457-A. South Hiawassee Road, Orlando, FL
32835, Phone Listed as 407-226-9164, http://www.ehmt.com/
usa.htm Website
Taken Down!
-
Executive Round Table, Address Unknown, Phone Unknown, http://www.encode.com/
exec/ purecont.htm Website
Taken Down!
-
Financial Fortress Associates, Address Unknown, Phone
Listed as 877-286-4101, http://www.f-f-a.com/report.html
-
Freedom Bound International, c/o 3939 South Sixth Street
#138, Klamath Falls, OR, Phone Listed as 888-878-8436 / 1-661-725-2411
(international) , http://americansovereign.com/trust.htm
-
Freedom Trust Group, 2435 East North Street #105, Greenville,
SC 29615, No Phone Listed, http://www.moneytrust.com/
book /ftgbk.htm also http://freedomtrustgroup.com
-
Freedom Enterprises, 4718 Meridian Ave. #287, San Jose,
CA 95118, Phone Listed as (408) 264-8101, http://u2.netgate.net/
~airtech/ Website
Taken Down!
-
Free World Order, Address Unknown, Phone Unknown, http://www.buildfreedom.com
- Heritage Living Trust ,-- Claims they are a "Contract
Trust" instead of a "Pure Trust", but their theory
is the same as the "Pure Trust" (i.e., that the Contacts
Clause of the U.S. Constitution will somehow protect you from
the tax man or creditors, which is totally bogus. A tax scam by
any other name will still land you in jail. Address listed as
P.O. Box 66972, Scotts Valley, CA 95067, Tel: 831-438-5047, Fax:
831-438-3004, http://www.heritagelivingtrust.com/
html/ Complex/ page0.htm
View the PowerPoint presentation used to perpetrate this Pure
Trust scam. Although the scam artists attempt to disclaim that
their "Private Contract" structure has any relationship
to an illegal "Common Law Pure Trust", somewhat humorously
the file name for their PowerPoint presentation is "CommonLawPureTrust".
Not the brightest scam artists, eh? ppt
- Innovative Financial Consultants, c/o 4747 E. Elliot
#29-418, Phoenix, AZ 85044, Phone Listed as 480-994-8382, http://www.i-f-c.com Website Taken
Down!
(DOJ
Press Release)
New! - Five Defendants Convicted of Tax
Crimes in Connection With Promotion of Abusive Trust Scheme
-
International Order of Self-Sustaining Business Societies,
P.O. Box 97272
Las Vegas, NV 89193, Phone Listed as 702-314-1251, link Website Taken
Down!
-
J.A.L. Financial, 3399 E. 19th St. Long Beach, CA 90804, http://www.jalfinancial.com/ Website Taken
Down!
-
New Scam! The JoY Foundation, 13936 W. Hillsborough Ave. Tampa, FL
33635, Phone Listed as 813-855-1266, http://www.joyfoundation.com/
-
Liberty Pure Trusts, Address Unknown, Phone Listed as
888-I-GOT-OUT, http://www.puretrust.com Website Taken
Down!
-
Linkco, P.O. Box 66781, Phoenix, AZ 85082, Phone
Unknown,
http://www.best-of-all.com/trusts.htm Website Taken
Down!
-
Money Trust www.moneytrust.com
-
National Trust Services (the Roy Fritts website), at www.purecontract.org
Website Taken
Down!
-
New Day Publishers, P.O. Box 411, Crowley, TX 76036,
Phone Listed as
-
Website Taken
Down!
-
Osworth Consulting & Marketing, PO Box 419, Williams,
OR 97544-0419, No Phone Listed, link
-
Passport Society, Saint Maarten, Netherlands Antilles,
Phone Listed as
599-52-8057, http://www.passportsociety.org
-
Phoenix Group, 61535 S. Hwy 97 Ste. 9 PMB 143, Bend,
OR 97702, Phone Listed as 918-222-7066, http://www.mysticbird.com Website Taken
Down!
-
ProtectYourSelf.com, No Address Listed, Phone Listed
as 918-222-703, http://www.protectyourself.com Website Taken
Down!
-
R & H Publishers, P.O. Box 52663, Tulsa, OK 74152,
Phone Listed as
918-599-8811, http://www.puretrusts.com Website Taken
Down! also http://www.givemeliberty.com
-
!SOLUTIONS! Group, 8190A Beechmont Ave.#333, Cincinnati,
OH 45255,
Phone Listed as 513-624-7340, http://www.no1040s.com/
-
Solutions International, Address Unknown, Phone Unknown
-
Sovereignty Pure Trusts, 16585 Pacific Coast Hwy - 2nd Floor, Sunset Beach, CA 90742, Phone Listed as 562-592-9047, link Scammers
Indicted Website
Taken Down!
-
R-Safe, P.O. Box 7720, Arlington, VA. 22207, Phone Listed
as 703-532-3219, http://users.erols.com/scambos/
-
Tax Research Foundation, P. O. Box 1034, Manvel, TX
77578, Phone Listed as 281-585-2211, http://www.trustsnow.com/
order.htm Website
Taken Down!
-
TNT Co., Address Unknown, Phone Unknown, http://web.ulysium.net/
~tntco/ Website
Taken Down!
-
Trust Educational Services, 1925 Palomar Oaks Way, Suite
203, Carlsbad, CA 92008, Phone Listed as 760-476-0290, http://www.trusts.org Website Taken
Down!
-
Trust Enterprises, P.O. Box 637, Solana Beach, CA 92075,
Phone Listed as 619-755-3357, link Website Taken
Down!
-
Wealth4Freedom, Address Unknown, Phone Unknown, http://www.wealth4freedom.com
-
Webtrust.com, Address Unknown, Phone Unknown, http://www.webtrust.com/
-
-
Worldwide Wealth Systems, Ltd., 3102 Classen Blvd. #286,
Oklahoma City, OK, 73118, link
-
Young, Green and Rifkin, 4139 Highlander Ave., Lake
Havasu, AZ 86406, Phone Listed as 520-680-9179, http://www.assetpro.us/ New Website Webpage makes this group look like a law firm, which it
is not.
-
Name Unknown, Phone Listed as 215-357-1346, http://www.best-solutions.com/
puretrust/ Website
Taken Down!
If you know of other groups which are promoting this scam, please
advise us by our online
form. If you have a "Pure Trust" from any of the above
groups, there is a good chance that you have committed felony tax
evasion. You should consult with a licensed tax attorney in your
area immediately to try to back you out of the structure
before you get caught
COLATOS AND FORCOLATOS
Some of the scam artists who sell Pure Trusts have figured out
that there is too much information available on Pure Trust scams,
so they have re-named their Pure Trusts as "COLATOS" (Common
Law Trust Organizations) and "FORCOLATOS" (Foreign Common
Law Trust Organizations). Don't be mislead: A scam by any other
name is still a scam. Although the fraudsters will try to tell you
that their "COLATOS" are "better" or "superior"
to the old Pure Trusts, it just ain't so. The "COLATOS"
and "FORCOLATOS" are every bit the worthless junk that
Pure Trusts are, and essentially the very same scam.
CASES WHERE PURE TRUSTS WERE ANNIHILATED
The following is a partial list of cases where Pure Trusts
were blown up. The scam artists who sell Pure Trusts will tell you
the lies that "They have never lost in court" and "The
IRS and creditors are afraid of them." Of course they have
to tell you that because if they didn't there is no way you would
buy one from them. But as shown, these are complete and total lies,
and there is no merit whatsoever to the Pure Trust, as the following
cases show what REALLY happens when the Pure Trust meets the IRS
(and it ain't pretty for the people who have formed Pure Trusts:
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Alsop
v. Commissioner, T.C. Memo. 1999-172
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Arcadia
Plumbing Trust v. Commissioner, T.C. Memo. 1994-453
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Brittain v. Commissioner, T.C. Memo. 1992-277
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Bixby v. Commissioner, 58 T.C. 757 (1972)
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Buckmaster v. Commissioner, T.C. Memo. 1997-236 (§ 6673
sanctions imposed)
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Buelow v. Commissioner, T.C. Memo. 1990-219 (§ 6673
sanctions imposed)
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Chase v. Commissioner, T.C. Memo. 1990-164, aff'd,
926 F.2d 737 (8th Cir. 1991)
-
Cheek v. Commissioner, T.C. Memo. 1987-84 (§ 6673
sanctions imposed)
-
Christal v. Commissioner, T.C. Memo. 1998-255
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Clifford v. Helvering, 309 U.S. 331 (1940)(lead case)
-
The Colby B. Foundation v. United States, 1997 U.S.
Dist. LEXIS 17698
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Dombrowski v. Commissioner, T.C. Memo. 1980-261
-
Edwards Family Trust v. United States, 572 F. Supp.
22 (E.D. N.M. 1983)
-
Estrada v. Commissioner, T.C . Memo. 1997-180
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Fogle v. Commissioner, T.C. Memo. 1986-74
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Furman v. Commissioner, 45 T.C. 360 (1966), aff'd
per curiam, 381 F.2d 22 (5th Cir. 1967)
-
United States v. Geissler, 94-1 USTC ¶ 50,060 (D. Ida.
1993)
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George v. Commissioner, T.C. Memo. 1999-381 (1999)
-
Ghalardi Income Tax Education Foundation v. Commissioner,
T.C. Memo. 1998-460 (1998) (§ 6673 sanctions imposed)
-
Gran v. Commissioner, T.C. Memo. 1980-558
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Hanson v. Commissioner, 696 F.2d 1232 (9th Cir. 1983), aff'g T.C. Memo. 1981-675
-
Harrold v. Commissioner, T.C. Memo. 1991-274
-
Holman v. United States, 728 F.2d 462 (10th Cir. 1984)
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Itz v. United States, 85-1 USTC ¶ 9345 (W.D. Tex.
1985); also, Itz v. United States Tax Court and United States
Internal Revenue Service, 87-2 USTC ¶ 9497 (W.D. Tex.
1987)
-
Jacobson v. Commissioner, T.C. Memo. 1981-261
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Keefover v. Commissioner, T.C. Memo. 1993-276; see also, Keefover v. Commissioner, T.C. Memo. 1989-151, aff'd
per curiam, 923 F.2d 857 (8th Cir 1990)
-
Kelley v. Commissioner, T.C. Memo. 1983-322
-
Leonard v. Commissioner, T.C. Memo. 1998-290 (§ 6673
sanctions imposed)
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Lucas v. Earl, 281 U.S. 111 (1930)(lead case)
-
Luman v. Commissioner, 79 T.C. 846 (1982)
-
Markosian v. Commissioner, 73 T.C. 1235 (1980)
-
Miller v. Commissioner, T.C. Memo. 1986-278
-
Morgan v. Commissioner, T.C. Memo. 1978-401
-
Muhich v. Commissioner, T.C. Memo. 1999-192
-
Neely v. United States, 775 F.2d 1092 (9th Cir. 1985)
-
United States v. Noske, 117 F.3d 1053 (8th Cir. 1997)
-
O'Donnell v. Commissioner, T.C. Memo. 1986-14
-
Para Technologies Trust v. Commissioner, T.C. Memo.
1994-366
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Paulson v. Commissioner, T.C. Memo. 1991-643
-
Photo Art Marketing Trust, T.C. Memo. 2000-57
-
Prindle International Marketing v. Commissioner, T.C.
Memo. 1998-164
-
Professional Services v. Commissioner , 79 T.C. 888
(1982)
-
Reynolds v. Commissioner, T.C. Memo. 1987-261
-
Sampson v. Commissioner, T.C. Memo. 1986-231 (§ 6673
sanctions imposed)
-
Sandvall v. Commissioner, 898 F.2d 455 (5th Cir. 1990), aff'g T.C. Memo. 1989-189 (§ 6673 sanctions
imposed)
-
Schauer v. Commissioner, T.C. Memo. 1987-237 (§
6673 sanctions imposed)
-
Schulz v. Commissioner, T.C. Memo. 1980-568, aff'd,
686 F.2d 490 (7th Cir. 1982)
-
United States v. Scott, 37 F.3d 1564 (10th Cir. 1994)
-
Smith v. Commissioner, T.C. Memo. 1986-487 (§
6673 sanctions imposed)
-
Smith v. Commissioner, T.C. Memo. 1998-91
-
Stoecklin v. Commissioner, T.C. Memo. 1987-453
-
Stokes v. Commissioner, T.C. Memo. 1999-204
-
Swayze v. Commissioner, T.C. Memo. 1983-168 (§
6673 sanctions imposed)
-
Tatum v. Commissioner, T.C. Memo. 1988-579 (§
6673 sanctions imposed)
-
Taylor v. Commissioner, T.C. Memo. 1983-34
-
Vercio v. Commissioner, 73 T.C. 1246 (1980)
-
Vnuk v. Commissioner, 621 F.2d 1318 (8th Cir. 1980), aff'g T.C. Memo. 1979-164
-
Wesenberg v. Commissioner, 69 T.C. 1005 (1978)
-
Whitehead v. Commissioner, T.C. Memo. 1992-455
-
Wilbur v. Commissioner, T.C. Memo. 1993-442
-
Yeoham Estate v. Commissioner, T.C. Memo.
1986-487 (§ 6673 sanctions imposed)
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Zmuda v. Commissioner, 731 F.2d 1417 (9th Cir. 1984), aff'g 79 T.C. 714 (1982)
FURTHER INFORMATION
ON PURE TRUST SCAMS
The following articles reveal the pure trust scam for the illegal
and always-unsuccessful tax evasion scheme that it is.Bob
Sommer's Trust Scams Series
Well-respected tax attorney
Bob Sommers has put together a series of articles dealing with
these inane and ineffective trusts.
Mark Pitcavage
Expose of Pure Trusts
Mark Pitcavage, PhD, of the
MilitiaWatchdog group, has written an excellent expose of the
Pure Trust promotes and the lies they spin to sell Pure Trusts.
Vern Jacobs
and Richard Duke
Two of America's best planner
discuss Pure Trust scams at great length.
Roger M. Wilcox
Has written an excellent expose of the scam trusts sold by National
Trusts Services ("NTS") a/k/a Trust Educational Services
("ETS") a/k/a several other aliases, at http://
home.netcom.com/ ~rogermw/ nts.html This page is good reading
about the pure trust scam in general, and de-bunks much of the
marketing materials distributed by these crooks.
Internal Revenue
Service
The IRS has issued numerous
warnings about Pure Trusts, and now even sponsors the "Abusive
Trust Project" to alert IRS enforcement attorneys and collection
agents about this scam, and how to quickly bust through it.
|
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Tony-the-Wonder-Llama
Detroit
Free Press
April 30, 2002
E. Lansing couple
charged with tax evasion
IRS says pair hid $671,000
in sham trust funds
By Katie Matvias
An East Lansing couple charged with hiding more than $600,000 in
sham trust funds and failing to file their taxes could face more
than 15 years in prison and $1 million in fines.
Gerald Thomas Mann, a 51-year-old Lansing dentist, and Laurel Rose
Mann, 49, are charged with three felony counts of tax evasion and
three misdemeanor counts of failure to file taxes.
They are expected to be arraigned Friday in a Grand Rapids federal
court.
"The sham trusts are increasing problems throughout the country
resulting in increased IRS attention,'' Assistant U.S. Attorney
Donald Davis said Monday.
The Manns are charged in the 1993, 1994 and 1995 tax years, said
Mark Kroczynski, special agent for the Internal Revenue Service.
During that time, they earned about $671,000, he said.
But they also didn't file federal or state income tax returns from
1993 through 2000, he said.
"Our investigations normally take awhile and many times by
the time they are completed you may have subsequent years that are
past,'' Kroczynski said.
Gerald Mann is being held in Newaygo County Jail and couldn't be
reached for comment. He was arrested Thursday in his Lansing office
by IRS agents.
Laurel Mann, who works for Michigan State University, was at one
of her children's sporting events when she was arrested. Officials
didn't hold her because she's not a flight risk, Davis said.
Mann said her husband did the taxes. She said she doesn't know
how they will plead.
"I'm totally in shock about what's happening here," she
said from her home Monday night. "I'm confused about the whole
ordeal."
The couple had a court hearing Monday but nothing happened because
they didn't have a lawyer, Davis said. It will continue Friday.
IRS officials say the Manns put the dental practice into the "Holmes
Dental Clinic Trust," the business real estate into the "Burroughs
Holding Trust," a personal residence into the "Nazareth
Security Trust," and a business checking account into the "Red
Cedar Audubon Trust'' in Belize.
According to the indictment, the couple put money from the dental
practice and their retirement into the Belize fund, then transferred
that to a Swiss bank account.
Kroczynski said many people, in similar cases, say the trust earned
money rather than themselves.
"The people feel consequently that they are not liable for
tax,'' he said.
Trusts are legal, but normally the person who sets it up can't have
an interest in the trust, he said.
"It will be up to a jury to decide if they are subject to
the tax laws of this country,'' he said. "Our contention is
they are. That's why we recommended prosecution."
Attorney Bob Sommer's
The Tax Prophet
www.taxprophet.com
Investigative Reporter David Marchant's
OffshoreAlert
offshorebusiness.com
Riser
Adkisson LLP
Critical analysis of contemporary risk management and asset protection
issues
Tax
Protestors, Pure Trusts, and Other Stupid De-Tax Schemes & Scams
Have a stupid theory why you shouldn't have to pay taxes? 861? Non-Filer?
Sovereign Citizen? Believe that the federal courts are actually
admiralty courts or that the only real citizens of the USA live
in Puerto Rico, Guam, and the District of Columbia, then this forum
is for you.
Tax
Practice & Policy and Tax Shelters Practical
and Practice issues for Professionals who practice in the area of
taxation. Moral, social and economic issues relating to taxes, including
international issues, the U.S. Internal Revenue Code, state tax
issues, etc.
http://www.assetpro.us
-- Offers the "Federal Contract Trust" which is simply
a re-packaged Pure Trust scam. Very cheesy website, and they charge
an absurd $4,995 for a type of trust that doesn't even exist! |
link
Claims to be run by Richard Young, 2915 W. Charleston
Blvd., #7, Las Vegas,
Nevada 89102, Ph: 702-383-6566 (Toll Free 1-800-330-3140). Hint:
If we know
about this group, so does the IRS and the conviction rate for those
using Pure Trusts (whether titled "Federal Contract Trust"
or otherwise) is 100%
Justice
Indicts Nine Promoters of Alleged Abusive Trust Scheme
-- Operators, Salesmen of Innovative Financial Consultants Charged
with Tax Fraud.
Summary
of Abusive Trust Schemes -- Released by the IRS Criminal
Investigation Division.
Foreign
Source Income Scam -- Douglas P. Rosile, Sr., is chased
by Justice Department for tax scam based on "an absurd reading
of Section 861 of the Internal Revenue Code", which supposedly
allowed people to not report their income unless it was from outside
the U.S.
Pure
Trusts/Common Law Trusts = More Convictions -- Recap of
about a dozen people so far this year who have sent to the pokey
for selling Pure Trusts or Common Law Trust Organizations. So far,
Pure Trusts are batting .000 career against the IRS.
Liberty
Estate Planning Network, Association for Certified Estate Planning
Attorneys and Eagle Publications Trust -- U.S. Justice Department
sues to stop fraudulent organizations run by Michael D. Richmond
and Rex E. Black of the Chicago area from marketing sham trust packages
employing bogus "Pass-Through Technology".
Justice
Department Slams Pure Trust Promoters -- The trusts that
the U.S. government was supposed to be "afraid to challenge"
are once again slammed, this time by the Justice Department, and
no doubt supported by the IRS to get the names of tax evaders who
have been using Pure Trust Organizations and Business Trusts, with
the idea of collecting lots of back taxes, interests, and penalties.
Justice
Department Cracks Down on Pure Trusts -- Pure trust promoters
around the country are charged with criminal tax evasion and serious
prison terms for selling Pure Trusts a/k/a Freedom Trusts, Constitutional
Trusts, Common Law Trust Organizations (COLATOS), and similar names.
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