Anderson Ark "information officer" goes to jail

[Demosthenes]

Tax scheme sends GJ woman to prison
By Daily Press Staff

DENVER — A Grand Junction woman was ordered to spend the next 28 months in federal prison for her role in the Anderson Ark Associates tax-fraud scheme.

According to the IRS, Kris Smith, 54, was convicted of fraud and false statements and the willful failure to file a tax return at trial in 2006. Other counts of fraud and false statements were dismissed.

She was ordered to prison Monday, after her appeal failed in January and will serve concurrent sentences of 28 months and 12 months. Smith must also pay more than $186,000 in restitution.

The Seattle-based AAA ran a variety of tax programs, including "Look Forward" and "Look Back." Numerous agents of AAA have been convicted of tax fraud and sentenced to prison.

Two former AAA defendants, James and Pamela Moran of Montrose, succeeded in having their convictions overturned and, at a new trial late last year, were acquitted on all counts.

The IRS said in a news release that in 1999, Smith used a scheme known as a "complex business organization" to eliminate current year taxes for that year, also recovering taxes paid in 1997 and 1998 in the form of a refund for more than $70,000.

The IRS said Smith formed a "sham partnership" called Rocky Venture, in which she was 95 percent owner, and created net operating losses from which she received her 95 percent distributive share.

"The net operating loss was large enough to eliminate current year taxes and carry back two prior years to recover taxes paid in those years," the IRS news release said. "In reality, the partnership was a sham, having no business purpose and lacking in any economic substance."

Smith's sentencing order detailed the Rocky Venture partnership, which was found to have taken out a fictitious loan via a "mock promissory note" signed by Smith. The partnership was supposed to market and sell tapes by AAA founder Keith Anderson.

Rocky Venture claimed a $1 million loss in 1999, with Smith claiming more than $900,000 of the losses — later disallowed by an IRS agent, as were refunds Smith obtained in 1997 and 1998.

Smith became an information officer for AAA in 2000, receiving commission for the sale of AAA products, which were deposited into her Costa Rican bank account.

The sentencing order said Smith was warned by her own accountant, who also testified to receiving calls from Smith a few weeks before her trial. The man said he felt Smith was trying to influence his trial testimony.

An IRS agent also testified that Smith hosted an AAA meeting in 2000, during which she explained "how to transition out of the tax system."

Smith also formed a limited liability company called NECO Associates in 2003. As the managing member of the LLC, she failed to file federal partnership tax returns in 2003.

In 2004, when some AAA members were tried, Smith signed an affidavit prepared by her associate, Jack Mecham. Mecham was filing suit against the government and the affidavit alleged the IRS and prosecutors had tampered with witnesses, suborned perjurious testimony and committed fraud.

"This sentence is part of a larger scheme about criminal activity driven by greed," Special Agent in Charge Terry Stuart (criminal investigation, Denver field office) said of Smith in the news release.

[LPC]

According to the IRS, Kris Smith, 54, was convicted of fraud and false statements and the willful failure to file a tax return at trial in 2006.

Why is the "Daily Press Staff" (of the Montrose Colorado Daily Press) taking the IRS's word for this? Why didn't the Daily Press Staff check the official court records to see if Kris Smith was convicted in 2006?

My read on this is that the Daily Press Staff are lazy idiots.

[grixit]

Least seaworthy Ark e-ver!

[webhick]

Least seaworthy Ark e-ver!

That's because it's uneven. Everyone knows that an Ark abbreviated with three As is going the way of the Titanic. Icebergs have uneven arks.

[.]

She had this part right:

she explained "how to transition out of the tax system."

She just forgot to mention the part about how the transition is into the prison system.