MLM + Pure Trusts = 9 Years

[Demosthenes]

Couple sentenced to prison for tax evasion
By Brett Dalton
The Journal Staff
Posted: Tuesday, January 8, 2008 7:19 PM CST
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A Lee's Summit couple who operated a multi-million dollar firm marketing trusts and a retail business selling American Silver Eagle coins was sentenced to federal prison Friday for aiding and abetting each other in filing false tax returns.

James E. Aldridge, Jr., 52, was sentenced to nine years in federal prison without parole, and his wife, Shirley L. Aldridge, 50, was sentenced to five years and three months in prison without parole. The couple was convicted in May 2007 on all five charges included in a federal indictment of aiding and abetting each other to file false tax returns from 2001 through 2005. Each of the five counts included in the indictment charged a separate instance in which the couple, aiding and abetting each other, filed a Form 1040 that contained false information.

During that time, the couple earned more than $1.6 million and evaded more than $650,000 of federal income tax owed, according to a news release from the U.S. attorney's office.
James and Shirley Aldridge were co-owners of Concept Marketing International, which sold American Silver Eagle coins. The company employed approximately 5,000 sales agents throughout the United States and generated gross sales of nearly $4.4 million in 2004. Their business plan was based on a four-tiered pyramid commission sales strategy, claiming that a consumer could earn $302,000 in monthly income if they continued to recruit more consumers into the pyramid, according to a news release.

The couple also created several trusts in order to evade federal taxation. Most of their income, according to a news release, was funneled into those trusts, then used for their own personal purposes, such as buying a home, jet skis and a $48,000 Cadillac DeVille. That income was not included in any federal tax return filed by any trust nor by James and Shirley Aldridge from 1999 to 2004.

James Aldridge also conducted seminars at which he advised the purchasers of American Silver Eagle coins on how to avoid taxation by establishing a home-based business - the purchase of the coins - in order to deduct personal expenses. For $15,000, CMI members could purchase a trust package that James Aldridge claimed would reduce their taxes by 97 percent or more, and allow them to deduct 90 percent of their personal living expenses, such as groceries, clothing, vacations and pet care.

Some of the information provided by James Aldridge during the seminars was false and included ways of committing criminal activity, according to Don Ledford, public affairs officer for the office of Jeff Wood, U.S. attorney for the Western District of Missouri. Ledford said what James Aldridge was teaching was "not a strategy for legally avoiding taxation."

"He was encouraging them to claim deductions that they were not legally entitled to take," Ledford said. "Some of the things he was telling people to do were just illegal."

However, Ledford said there is not a connection between what James Aldridge was teaching at his seminars and what he and his wife were charged with.

"We can't make a connection between what they were doing and what they were telling people to do," Ledford said. "(The Aldridges) were charged for not paying their taxes."

Ledford said he could not comment on whether or not anyone who attended James Aldridge's seminars and took his advice and suffered consequences from it could file a civil lawsuit against James Aldridge.

The case was prosecuted by Assistant U.S. Attorney William L. Meiners. It was investigated by IRS-Criminal Investigation.