Michael Craig Cooper, founder of Renaissance, The Tax People, Inc. was arrested late Tuesday crossing the border from Mexico to the U.S. near Laredo, Texas.
On August 13 of this year, a federal grand jury returned a 148-count indictment charging Mr. Cooper, together with Jesse Ayala Cota, Todd Eugene Strand, Daniel Joel Gleason, and Renaissance, The Tax People Inc. ("Renaissance") with conspiracy to defraud the United States by impeding the IRS and to commit mail and wire fraud, willfully assisting in the preparation of fraudulent federal income tax returns; mail fraud and wire fraud.
Mr. Cooper and Renaissance are also charged with money laundering and conspiracy to commit money laundering and engaging in monetary transactions in criminally derived property of a value greater than $10,000. The indictment remained sealed pending yesterday's arrest of Mr. Cooper.
âFraudulent tax schemes will be investigated and prosecuted to the fullest extent of the law,â said Assistant Attorney General Eileen J. O'Connor. âPeople who promote or join schemes to hide income from the IRS risk criminal prosecution and, upon conviction, a lengthy term of imprisonment.â
âToday's action is an example of how the government will not tolerate abusive tax fraud schemes. Those who attempt to manipulate the interpretation of the tax laws for their own personal gain at the expense of others will be held accountable,â stated Nancy Jardini, Chief, IRS Criminal Investigation. âThe honest, hardworking American taxpayer pays the price for these scams against the government and the IRS will continue to do its job of investigating organizations that engage in this type of activity.â
The indictment alleges that from June 1997 though April 2002, the defendants operated a scheme to defraud the IRS and other individuals by marketing a program designed to sell individuals tax deductions through false, fraudulent and misleading representations. According to court papers, Renaissance sold was a fraudulent home-based business package through which it offered tax support to its members in the form of purportedly legitimate tax return preparation, tax advice and audit protection.
Participants, referred to as âIndividual Marketing Associatesâ (IMAs), were allegedly encouraged to modify their Forms W-4 to decrease the amount of income taxes withheld from their pay in order to afford the $300 to $1,200 purchase price for a Renaissance package. The defendants allegedly promoted the unlawful deduction of personal expenses as if they were legitimate business expenses. They also allegedly made false assurances as to the legality of Renaissance's activity during meetings and in promotional material, going so far as to infer that the IRS had approved the Renaissance tax program. They also allegedly concealed material facts about the business package, including the actual income potential for IMAs. The indictment alleges the defendants operated an illegal pyramid scheme, requiring IMAs to pay monthly fees to qualify for commissions and offering IMA's the opportunity to receive commissions and bonuses for recruiting others to join Renaissance.
The indictment alleges that the individual defendants were involved in the scheme as follows:
- Mr. Cooper was the President, Chief Executive Officer, and founder of Renaissance;
- Mr. Cota is a former IRS employee who managed Renaissance's âTax Dream Teamâ from July 1, 1999 through May 10, 2001. The âTax Dream Team,â also known as the âTax Team and the Dream Team,â was a group of individuals promoted by Renaissance as tax experts.
- Mr. Strand was Mr. Cooper's âright-hand manâ and served as the Vice-President of Marketing for Renaissance. By August 23, 1999, Mr. Strand held the title of National Marketing Director.
- Mr. Gleason was the Director of the Tax Team from approximately March 23, 1998 through approximately June 30, 1999.
If convicted, each defendant faces the following maximum potential sentences:
- Five years in jail and $250,000 in fines for conspiracy to defraud the IRS and to commit mail and wire fraud;
- Five years in jail and $250,000 in fines for each count of mail fraud and wire fraud;
- Three years in jail, $250,000 in fines and costs of prosecution for each count of aiding and assisting in the preparation of a fraudulent tax return;
- Twenty years in jail and $250,000 in fines for conspiracy to commit money laundering and money laundering; and,
- Ten years in jail and $250,000 in fines for each count of engaging in monetary transactions in criminally derived property of a value greater than $10,000.
The indictment also seeks the forfeiture of $84 million in United States currency plus land, vehicles, gold coins, bank accounts, and life insurance polices-the amount allegedly obtained directly or indirectly from these offenses.
The charges contained in the indictment are only allegations. In the American justice system, a person is presumed innocent unless and until he or she is proven guilty in a court of law.