U.S.

Don't Even Think About It

By CBSNews.com staff CBSNews.com staff

March 6, 2001 / 8:56 AM EST / CBS

With tax time just around the corner, Uncle Sam has just one message: don't even THINK about trying to evade taxes by means of an illegal but tempting scheme.

With that message in mind, hundreds of Internal Revenue Service investigators raided several suspected promoters of tax evasion schemes in what the agency calls its most extensive crackdown ever.

That's according to the New York Times, which says some 300 IRS agents in pursuit of promoters who used foreign banks and trusts to help people hide their income conducted more than three dozen searches last week.

Federal prosecutors say six people in New Jersey, Washington state, California and Costa Rica were charged in a conspiracy to launder $470,000 through an illegal offshore trust program also used by clients to avoid paying U.S. taxes.

"We are sending a strong message that law enforcement views such activities as very serious criminal conduct and will devote the necessary resources to prosecute such crime," said U.S. Attorney Donald K. Stern, in Boston.

"Last week's historic enforcement activities send an unmistakable signal about IRS commitment to pursue investigations of promoters and their clients who would try to move money offshore to evade taxes," IRS Commissioner Charles O. Rossotti told the Times.

At least two of the suspects in custody are reportedly affiliated with Anderson's Ark, which describes itself as "a free enterprise organization specializing in freedom, personal privacy, offshore structures and banking, and sovereignty," based in the U.S. but operating in an unspecified number of countries around the globe.

The IRS calls the 21-year-old business a merchant of sham trusts for tax evaders, but company owner Keith Anderson says he and those arrested during raids in Costa Rica and Washington state have done nothing wrong and will be vindicated if brought to trial.

The IRS also raided the Institute of Global Prosperity, an Internet company which has been the subject of previous controversy over its methods; author Jerome Schneider's California office; and the offices of Schneider's lawyer, Eric Witmeyer.

Schneider wrote and published The Complete Guide to Offshore Money Havens and How to Own Your Own Private International Bank and, according to the Times, runs financial seminars whose guest lecturers have included Oliver North and GOP Congressman Billy Tauzin.

A spokesman for Tauzin says the congressman gave a speech in 1999 in Vancouver on his plan to replace the income tax with a national sales tax, but left immediately afterwards, after concluding that the event wasn't what he'd thought and seemed to be devoted instead to investment schemes and tax evasion.

Harland Braun, Schneider's lawyer, says his client has not violated any laws.

Braun also says Schneider suspected that the undercover IRS agents eventually named in the affadavit suppoting the search warrant were tax evaders and for that reason, he turned them in to the authorities.

The Institute for Global Prosperity's activities include, according to its Web site, assistance in "Offshore Banking Strategies," "Asset Protection," and "Tax Reduction Strategies."