Another guilty plea in Renaissance/Tax People case

[Demosthenes]

FOR IMMEDIATE RELEASE
MONDAY, MARCH 26, 2007 http://www.usdoj.gov/usao.ks/press.htm

“RENAISSANCE, THE TAX PEOPLE” PROMOTER PLEADS GUILTY TO $75 MILLION FRAUD

TOPEKA, Kan. – Todd Eugene Strand of Murrieta, Calif., pleaded guilty today in a Kansas City, Kan., federal court to conspiracy to defraud the United States in the assessment and computation of taxes and mail fraud charges for his involvement in a tax fraud scheme, the Justice Department and the U.S. Attorney for the District of Kansas announced.

The indictment alleged that from June 1997 though April 2002, Strand and co-defendants Daniel Joel Gleason, Michael Craig Cooper, and Jesse Ayala Cota operated a scheme to defraud the Internal Revenue Service (IRS) and individuals by marketing a program promoted by the Topeka-based Renaissance, The Tax People Inc. designed to sell illegal tax deductions through false and misleading representations. Strand pled guilty to conspiracy to commit mail and wire fraud and to defraud the United States in connection with the promotion of a fraudulent tax scheme. He also pleaded guilty to a separate charge of aiding and abetting mail fraud.

In his plea, Strand admitted that beginning in November 1995 he served as co-conspirator Michael Craig Cooper’s right-hand man. Strand held the position of vice president of Renaissance, the Tax People Inc. By Aug. 23, 1999, Strand was the national marketing director for Renaissance, and had earned more than $250,000 in income from his involvement with the company.

“People who promote or participate in schemes to evade federal income taxes harm not only the federal Treasury, but all honest taxpayers.” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “Working together with the Internal Revenue Service and United States Attorney’s Offices, the Tax Division has made investigating and prosecuting such crimes a high priority.”

According to the indictment, Renaissance’s tax package, which went by various names including the “Tax Relief System,” offered its customers tax return preparation, tax advice, and audit protection services. Renaissance claimed that its customers could lawfully reduce their income taxes by deducting personal expenses as legitimate business expenses by following this program.

“As a national marketing director for Renaissance, Mr. Strand peddled a fraudulent “tax relief system” through promotional meetings, conferences, rallies, conference calls, and promotions by mail,” said Eric Melgren, U.S. Attorney for the District of Kansas.

Renaissance charged customers between $300 and $1,200 to join and an additional $100 monthly per package purchased. Renaissance promoted that the program would pay for itself through reduced federal income tax withholdings and directed customers to file amended Forms W-4 with their employers, reducing taxes withheld from their salaries. Strand admitted he and his co-conspirators prepared and caused to be prepared a substantial number of false federal income tax returns. These returns falsely inflated deductions and tax credits.

“There are many knowledgeable and reputable tax advisors, but when promoters such as Todd Strand of the Renaissance group promise a system that enables taxpayers to avoid paying income taxes: Buyer Beware,” said IRS Criminal Investigation Chief Eileen C. Mayer. “The IRS is very concerned that taxpayers are being misled by unscrupulous promoters making outlandish claims that their system helps taxpayers avoid paying income taxes. If you aren't sure about a tax arrangement, seek expert advice. The Web site at http://www.irs.gov/businesses/small/art ... 88,00.html has information about how to detect scams, schemes and cons.”

As part of his plea, Strand admitted that he and his co-conspirators falsely assured Renaissance customers that the tax programs were legal. Strand acknowledged that on Oct. 16, 2000, a co-conspirator sent an e-mail message to the Renaissance customers falsely stating the existence of written endorsements from “over 2,000 tax attorneys, enrolled agents and Certified Public Accountants (CPA) that every strategy contained in the Tax Relief System is absolutely sound, unassailable and proven over the past 40 years. Strand further admitted that the conspiracy defrauded Renaissance customers of more than $75 million and caused a tax loss in excess of $20 million.

Today’s guilty plea brings the number of individuals who have pleaded guilty to felony charges in this and other Renaissance-related cases to six, including Daniel Joel Gleason, Thomas Steelman, Frankie Ruth, Elizabeth Crotts, and Alexander Federico.

Strand faces a potential maximum sentence of 10 years in prison followed by up to three years of supervised release, a $500,000 fine, and liability for the costs of prosecution. U.S. District Judge Carlos Murguia scheduled sentencing for Jan. 7, 2008. This case was investigated by criminal investigators from the IRS and from the U.S. Postal Service.

[.]

defrauded Renaissance customers of more than $75 million and caused a tax loss in excess of $20 million

P.T. Barnum time. Assuming the tax loss was only $20 million, the marks paid almost $4 for each $1 of tax "saved."

Assuming the tax loss to be $75 million, it's buck for buck and they may as well have just paid their taxes and avoided the aggravation, not to mention penalties and interest.

[The Observer]

I find it interesting that a number of the principals in Renaissance have been pleading guilty, yet Jesse Cota, a former IRS executive out of the California area appears to be willing to head to trial. From what I have gathered, Mr. Cota did not have a reputation for being the sharpest knife in the drawer, and it appears that he is may end up holding the bag on this one. It is particularly ironic that Cooper's "right-hand" man has pled guilty before Cota has. One only can imagine that he cannot see the handwriting on the wall.

[grammarian44]

Mr. Cota did not have a reputation for being the sharpest knife in the drawer, and it appears that he is may end up holding the bag on this one.

I find that my bags will tear very easily if I try to hold them with a sharp knife.