Six defendants found guilty in Chicago tax fraud trial

Six defendants were convicted Monday after participating in a nationwide tax scheme that enabled 650 wealthy taxpayers to cheat the government out of $60 million.

Michael Vallone of Orland Park, IL, Edward Bartoli of Clearwater, FL, Robert Hopper of Gadsden, AL, Timothy Dunn of Chesterton, IN, William Cover of Naperville, IL, and Michael Dowd of Glenview, IL were convicted of tax-fraud conspiracy and other charges after the 11-week trial in U.S. District Court in Chicago.

According to the Chicago Sun Times, from 1994 to 2003, the six defendants organized, promoted, and sold domestic and foreign/offshore trusts to clients, primarily self-employed individuals, with the effect of diverting income into sham domestic and foreign trusts through a now-defunct company on behalf of clients, hiding hundreds of millions of dollars of income from the government.

The IRS uncovered the operation after engaging in an undercover investigation code-named "Operation Trust Me." More than 30 convictions are still pending in the case with defendants in Florida, Illinois, New York, Ohio, and West Virginia.

The six defendants in the Chicago trial were found guilty of one count each of tax fraud conspiracy, i.e. conspiracy to defraud the United States by impeding the IRs in the collection of tax revenue and conspiracy to aid and assist the preparation and filing of false tax returns on behalf of clients, in addition to being found guilty of other charges. In addition, all six defendants were found guilty of tax fraud regarding their own personal income tax returns.

Sentencing is expected to occur in August or September.

You may like these other stories...

Read more from Allan Boress, CPA, in the "Truth be told about business development" archive. Ours is an unusual business, in that very few CPAs are actively involved in their communities and giving back...
Four Minneapolis-Based Return Preparers Indicted for Conspiracy, Aggravated Identity Theft, and Preparing False Returns A sixty-three-count superseding indictment charging Chatonda Khofi, Ishmael Kosh, Amadou Sangaray,...
By Jason Bramwell, Staff WriterAreas of general accounting and finance – including forecasts and budgets, financial reporting, and mergers and acquisitions – were cited by more than half of CFOs as projects they...

Already a member? log in here.

Upcoming CPE Webinars

Oct 22This webinar will include discussions of important issues in AU-C 800, Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.
Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.