The big bad gov goes after PQI

[Demosthenes]

FOR IMMEDIATE RELEASE
TAX
TUESDAY, APRIL 8, 2008

JUSTICE DEPARTMENT FILES INJUNCTION SUITS IN NATIONWIDE
CRACKDOWN ON ALLEGED TAX DEFIER SCHEME PROMOTERS

“Pinnacle Quest International” Allegedly Promoted
“Tax-Fraud Trade Shows” at Resorts and on Mediterranean Cruise
WASHINGTON- The United States has filed civil injunction complaints in three federal courts on the east and west coasts, seeking to bar promotions of alleged tax-fraud schemes, the Justice Department announced today. The government complaints and other court papers allege that a multi-level marketing organization called Pinnacle Quest International (PQI) and a number of individuals and organizations currently or formerly affiliated with it are promoting a variety of fraudulent tax defier schemes.
The complaint filed against PQI alleges that the organization has 830 salespeople, thousands of customers, and gross sales from 2002 through 2006 of approximately $54 millions. During the same period, PQI’s leaders allegedly received commissions from sales of PQI products of approximately $8.8 million.
Court papers allege the defendants have sold tax-fraud and other schemes through vendors at trade-show-like conferences at resorts around the world and—in one instance—at a 400-person conference on the Celebrity Cruise Line ship Galaxy in the Mediterranean Sea in May of 2007. The complaint describes PQI vendors as “a Who’s Who of notorious tax defiers.”
The complaint alleges that one PQI promoter on the Galaxy cruise was Sherry Peel Jackson, a former IRS revenue agent turned promoter of frivolous tax theories. Jackson allegedly earned some $138,000 in commissions on sales of PQI products from 2002 to 2006. She was indicted by a federal court in Atlanta shortly before the cruise and was convicted of tax crimes last year by a federal jury. In February of this year Jackson was sentenced to four years in prison for those crimes.
A list of the alleged PQI conference locations and dates is provided at the end of this press release. Copies of the three injunction complaints will be posted today on the Justice Department Tax Division’s website.
The suits allege that PQI, based in Ft. Walton Beach, Fla., is a successor to Institute of Global Prosperity, a business that sold tax-fraud schemes until law-enforcement actions caused it to shut down. Daniel Andersen, a co-founder of Global Prosperity, pleaded guilty in 2004 to a federal felony tax charge. Last November another Global Prosperity co-founder, David Alan Struckman, was found guilty of tax evasion and conspiracy in a federal court in Seattle. According to the PQI injunction complaint, PQI took up where Global Prosperity left off, and has been promoting tax-fraud schemes similar to those that Global Prosperity formerly promoted.
The suit against PQI was filed Monday in U.S. District Court for the Northern District of Florida, in Pensacola. Named as defendants in addition to PQI are Claudia Hirmer of Niceville, Fla., alleged to be the de facto leader of PQI’s “Executive Council,” and other individuals alleged to be members of PQI’s Executive Council.
The other two suits were filed in Portland, Ore., and Tacoma, Wash., in the U.S. District Courts for the District of Oregon and the Western District of Washington.
The Washington suit names Sharon Kukhahn of Tacoma, who allegedly sells a scheme that falsely purports to “decode” Internal Revenue Service (IRS) computer transcripts of customers’ taxpayer accounts to show that the customers are not liable for federal income tax. Kukhahn allegedly falsely advises customers that the IRS, in order to subject people to federal taxes, fraudulently misidentifies citizens as residents of a U.S. territory such as the U.S. Virgin Islands, or misidentifies them as operating an enterprise subject to federal excise tax, such as firearms manufacturing. According to the complaint, Kukhahn charges single taxpayers between $1,750 and $1,900 and charges married taxpayers between $2,450 and $3,195 for her bogus “decoding” service.
The Oregon suit names Eugene “Gino” Casternovia of Ashland, Ore., and three other individuals. According to the Oregon complaint the defendants operate two businesses in Medford, Ore., Southern Oregon Resource Center Educational Services (SORCE) and Castlenuevo Inc., that work with PQI to promote tax scams involving the use of sham entities to help customers conceal their assets. The defendants also allegedly promote a “disenfranchisement” scam, falsely telling customers that the federal income tax system is voluntary and that customers can opt out of their federal income tax obligations by revoking their Social Security numbers.
“The size and sheer brazenness of the tax defier activities alleged in these complaints are staggering,” said Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division. “Tax defiers sometimes claim to be ‘patriots,’ but those who push bogus tax schemes are nothing more than con artists, and those who pay for these schemes are buying nothing but trouble.”
“Tax scheme promoters should be aware that we will continue to work closely with the Justice Department to shut them down,” said IRS Commissioner Doug Shulman. “Taxpayers should carefully review any questionable advice because they are responsible for what goes on their tax returns.”
Assistant Attorney General Hochman thanked Tax Division attorneys Robert Fay, Grayson Hoffman, John Monroe and Seth Heald, as well as agents and attorneys from the IRS, who were all involved in the investigations leading up to these injunction suits. The complaint in the PQI case notes that the IRS investigated the case with assistance from the Joint International Tax Shelter Information Centre—known as JITSIC—which helps tax administrations from five nations identify and curb abusive tax schemes and transactions.
Since 2001, the Justice Department’s Tax Division has obtained injunctions against more than 320 tax-fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website, as is information about the Justice Department’s Tax Division.


PQI Conferences Alleged in Government Complaint

Date of Conference
City and Country
Location
December 8-12, 2002
Punta Cana, Dominican Republic
The Barceló Bávaro Beach Resort

December 6-12, 2003
Cancun, Mexico
Hilton Cancun

June 20-26, 2004
Cabo San Lucas, Mexico
Crowne Plaza Hotel

September 19-25, 2004
Panama City, Panama
Marriott Hotel

February 19-25, 2005
Cancun, Mexico
Hilton Resort & Hotel

October 22-30, 2005
Ixtapa, Mexico
Melia Azul Ixtapa Resort

May 23-June 3, 2006
Cancun, Mexico
Moon Palace

December 2-9, 2006
Cancun, Mexico
Unknown

February 25-March 5, 2006
Malta
Radisson SAS Golden Sands

May 14-21, 2007
Various Mediterranean ports in Italy, Greece and Turkey
Celebrity Cruise Lines ship Galaxy

September 16-22, 2007
Cancun, Mexico
Moon Palace

May 18-24, 2008
Cancun, Mexico
Moon Palace

April 12-19, 2009
Paris, France
Westin Paris

Defendants Named in PQI Injunction Suit (N.D. Fla.)

Name
City and State
Claudia Hirmer
Niceville, Florida

Mark Hirmer
Niceville, Florida

Brian Barker
Destin, Florida

Tonya Holder
Destin, Florida

Joshua Holder
Destin, Florida

Armand Bright
El Cajon, California

S. Anthony Larson
Seattle, Washington

Douglas Hagerty
Kent, Washington

Michael Leonard
Elmira, New York

Arnold Manansala
Renton, Washington

Nadine Griffin
Danvers, Massachusetts

Ellen Stubenhaus
Doral, Florida

Dover Perry
Renton, Washington

Joseph McPhillips
Colorado Springs, Colorado

Lee Williams
Crystal Beach, Florida

Michele Brown
Holly Springs, North Carolina
Defendant Named in Sharon Kukhahn Injunction Suit (W.D. Wash.)

Sharon Diane Kukhahn
Tacoma, Washington

Defendants Named in Gino Casternovia / SORCE Injunction Suit (Ore.)
Name City and State
Eugene “Gino” Casternovia Ashland, Oregon
Robert Hagopian Las Vegas, Nevada
Rod Pendell Ashland, Oregon
Mark Lyon Williams, Oregon
Southern Oregon Resource Center Educational Services (“SORCE”) Medford, Oregon
Executive’s Resource, LLC Ashland, Oregon
Castlenuevo, Inc. Ashland, Oregon

[Demosthenes]

http://www.cheatingfrenzy.com/pqi1.pdf

It's like reading Who's Who of the Tax Protest world.

Bill Benson, Bob Schulz, Sherry Jackson, the Anderson clan, Dave Struckman, SORCE, IMF Decoder, Robbie Struckman, and so on.

[Judge Roy Bean]

Well, with a little looking around that helps to explain who "Gino" is in the two videos:

http://quatloos.com/Q-Forum/viewtopic.php?f=19&t=2304

:ninja:

[AFTP]

Defendants Named in Gino Casternovia / SORCE Injunction Suit (Ore.)
Name City and State
Eugene “Gino” Casternovia Ashland, Oregon
Robert Hagopian Las Vegas, Nevada
Rod Pendell Ashland, Oregon
Mark Lyon Williams, Oregon
Southern Oregon Resource Center Educational Services (“SORCE”) Medford, Oregon
Executive’s Resource, LLC Ashland, Oregon
Castlenuevo, Inc. Ashland, Oregon

Demo,
Could you keep us posted on these guys?
I'd like to know what happens.

[Demosthenes]

Sure.

This should get you started, AFTP:

http://www.cheatingfrenzy.com/gino1.pdf

[AFTP]

Have charges been filed?

[Judge Roy Bean]

I can't imagine a grand jury isn't considering criminal charges. The civil injunctive relief being sought will at least shut down the web sites and end the promotion of the scam, although trying to scub the nonsense videos from the 'net is an almost impossible task.

Keep a Google news alert open for any of the names; the USAs office is very reliable about issuing press releases when indictments are handed down, and also reliably mum about what is going on or not going on prior to that.

[AFTP]

Keep a Google news alert open

Good idea.