Four of eight promoters of a fraudulent tax- and debt-elimination scheme, including two Renton men, have been sentenced to lengthy prison terms for their roles in tax fraud, wire fraud and money laundering, the Justice Department and Internal Revenue Service announced Thursday.
The remaining four will be sentenced over the next two months, according to a Justice Department press release.
On March 31, 2010, a federal jury returned guilty verdicts against eight people, following a month-long trial in Pensacola, Fla., involving the promotion of fraudulent schemes through Pinnacle Quest International, also known as PQI and Quest International.
Arnold Ray Manansala of Renton was sentenced to 12 years in prison for conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering.
Dover Eugene Perry, also of Renton, was sentenced to 10 years in prison for conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering.
Michael Guy Leonard of Troy, N.Y., was sentenced to nine years and one month in prison for conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering. Mark Daniel Leitner of Fairport, N.Y., was sentenced to five years in prison for conspiracy to defraud the United States and to commit wire fraud.
According to the evidence presented during trial, PQI was an umbrella organization for numerous vendors of tax and credit card debt elimination scams, according to the press release. Some of the PQI vendors, such as Southern Oregon Resource Center for Education (SORCE), sold bogus theories and strategies for tax evasion.
For fees starting at $10,000, SORCE assisted its customers in the creation of a series of sham business entities in the United States and Panama. Other tax-related PQI vendors denied the legitimacy of the income tax system on various theories and provided customers with a “reliance defense” that consisted of a paper trail of frivolous correspondence which a client could allegedly use as evidence of good faith if the client were prosecuted, according to the press release.
At trial, the government established that other PQI vendors sold fraudulent schemes for eliminating credit card debt, the most successful of which was called Financial Solutions. Financial Solutions charged its customers thousands of dollars for a series of letters to send to credit card companies disputing the lawfulness of the underlying debt. The product was wholly ineffective, and customers typically were sued by their creditors and often forced into bankruptcy.
According to the evidence, another PQI vendor, MYICIS, operated as a sophisticated, computerized “warehouse bank.” MYICIS was a single bank account in which customers pooled their money. MYICIS was promoted to PQI’s clients as a method to hide their assets from the IRS as a result of the pooled nature of the account. MYICIS had 3,000 clients and approximately $100 million in deposits over a three year period.
“Today’s sentences send a powerful and unequivocal message to those who seek to evade and help others evade their taxes,” said Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division in the press release. “Those who promote tax fraud schemes will be investigated, prosecuted, and convicted, and they also face substantial prison sentences.”
