Craig Shaber Indicted on Conspiracy and Tax Evasion Charges

Source- http://www.justice.gov/tax/txdv11691.htm

WASHINGTON - A San Diego attorney was sentenced by U.S. District Judge John A. Houston to 10 months in prison for evading taxes on at least $3 million in unreported income from 2000 to 2002, the Department of Justice and Internal Revenue Service (IRS) announced today. Judge Houston also ordered Craig Shaber, the attorney, to pay $555,000 in restitution to the IRS and to serve three years of supervised release. Shaber was indicted on conspiracy and tax evasion charges on Aug. 14, 2009, and subsequently pleaded guilty to tax evasion on Oct. 21, 2010.

According to the indictment, plea agreement and other documents filed in U.S. District Court in San Diego, between 1999 and 2002, Shaber and Steven Wright, a San Diego accountant, fraudulently acquired control of numerous public shell companies by, among other things, installing nominee officers and directors and submitting false registration statements and reports to the U.S. Securities and Exchange Commission (SEC) and the National Association of Security Dealers (NASD). Shaber and Wright earned millions of dollars from the sale of the public shell companies and deposited the proceeds into bank accounts in the names of Bonaventure Capital Ltd., International Solutions and one of Shaber’s client trust accounts. In 2002, Shaber and Wright received $260,000 in cash from the sale of one of the companies. In 2003, the SEC filed a complaint related to Shaber’s and Wright’s conduct selling the public shell companies.

Shaber then evaded taxes on the millions of dollars earned from the sale of the public shell companies. He withdrew the proceeds from the bank accounts for his own personal benefit in such a way that it concealed the fact that he received income from the stock scheme. Shaber disbursed these funds to various bank accounts in the names of nominee entities that he controlled and used accounts in the names of nominee entities to pay for personal expenses to help conceal his receipt of the income. Some of the nominee entities held title to various assets, which also helped conceal Shaber’s receipt of taxable income and his control over some of these assets.

The department said that Shaber also filed false individual federal income tax returns from 2000 to 2002 that failed to report income earned from the shell company scheme. Shaber and Wright also caused the filing of false corporate federal income tax returns that helped disguise their receipt of taxable income. According to the indictment, Shaber used the proceeds from the shell company scheme to purchase numerous luxury items, including his personal residence in Coronado, Calif., a McDonnell Douglas helicopter, a World War II-era Tigercat airplane, a Plymouth Prowler, a Porsche 996 Turbo and artwork.

Wright was sentenced on March 21, 2011, before U.S. District Judge Marilyn L. Huff in San Diego to three months in prison, three months community confinement and three years of supervised release. Wright also was ordered to pay a $2,000 fine and $378,000 in restitution for evading more than $380,000 in taxes from 2000 to 2002. Wright previously pleaded guilty on Aug. 14, 2009, and cooperated with the government in the prosecution of Shaber.

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