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Tax Shelter Promoter Pleads Guilty to Conspiring to Defraud the IRS

Source: United States Department of Justice

Promoter, Along with His Conspirators, Caused a Tax Loss of Approximately $43 Million

A Texas man pleaded guilty yesterday to conspiring to defraud the IRS by promoting and selling a fraudulent tax shelter. 

According to court documents, from at least February 2018 until September 2023, Larry C. Conner, 69, of Frisco, conspired with others to defraud the IRS by promoting to taxpayers nationwide an abusive trust tax shelter in which taxpayers diverted nearly all of their income through a series of three purported “non-grantor” trusts and a so-called “private family foundation” for purposes of evading the assessment of taxes owed on that income. Conner promoted the abusive trust tax shelter at in-person seminars to clients in the name of The Business Solutions Group (TBSG). Conner sold the trusts and foundations used in the abusive trust tax shelter for a fee typically ranging from $25,000 to $50,000. Conner admitted that he knew the tax shelters he promoted were fraudulent based on repeated warnings he received from attorneys and accountants that the tax shelter was fraudulent and illegal and his knowledge and receipt of materials that the IRS publishes to educate the public about the illegal nature of abusive trust tax shelters. 

Conner further admitted to personally using the abusive trust tax shelter from 2016 through 2021, to evade income taxes on about $5.2 million of his income. 

Conner admitted to promoting the abusive trust tax shelter in concert with the following individuals, among others: a Colorado couple, Timothy McPhee and Marcia Predmore; a Nevada Certified Public Accountant, Weldon Wulstein; a Wyoming-based bookkeeper, Suzanne Thompson; a Mesquite, Nevada man, Roderick Prescott; and an Arizona-based tax preparer, Kent Ellsworth. Conner and his co-conspirators’ caused the filing of false tax returns fraudulently sheltering approximately $156 million in income, which resulted in an approximate tax loss to the IRS of $43 million. 

McPhee previously pleaded guilty to conspiracy to defraud the United States, tax evasion, and, in a separate case, wire fraud. He is currently serving a 151-month prison sentence. 

In a separate five-week trial taking place throughout May-June 2026, a jury found Predmore, Wulstein, Thompson, and Prescott guilty of conspiracy to defraud the United States and other tax-related felonies. All four are scheduled to be sentenced in January 2027. 

Kent Ellsworth pleaded guilty to two counts of aiding and assisting in the preparation of a materially false and fraudulent tax return and is pending sentencing in the District of Arizona on Dec. 7. 

Conner pleaded guilty to conspiracy to defraud the United States. He is scheduled to be sentenced on Jan. 26, 2027, and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. 

Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division made the announcement.

IRS Criminal Investigation investigated the case. 

Lauren K. Pope and Amanda R. Scott, both formerly of the Criminal Division’s Tax Section, prosecuted the case. 

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (Fraud Division). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

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Security News: Tax Shelter Promoter Pleads Guilty to Conspiring to Defraud the IRS

Source: United States Department of Justice

Promoter, Along with His Conspirators, Caused a Tax Loss of Approximately $43 Million

A Texas man pleaded guilty yesterday to conspiring to defraud the IRS by promoting and selling a fraudulent tax shelter. 

According to court documents, from at least February 2018 until September 2023, Larry C. Conner, 69, of Frisco, conspired with others to defraud the IRS by promoting to taxpayers nationwide an abusive trust tax shelter in which taxpayers diverted nearly all of their income through a series of three purported “non-grantor” trusts and a so-called “private family foundation” for purposes of evading the assessment of taxes owed on that income. Conner promoted the abusive trust tax shelter at in-person seminars to clients in the name of The Business Solutions Group (TBSG). Conner sold the trusts and foundations used in the abusive trust tax shelter for a fee typically ranging from $25,000 to $50,000. Conner admitted that he knew the tax shelters he promoted were fraudulent based on repeated warnings he received from attorneys and accountants that the tax shelter was fraudulent and illegal and his knowledge and receipt of materials that the IRS publishes to educate the public about the illegal nature of abusive trust tax shelters. 

Conner further admitted to personally using the abusive trust tax shelter from 2016 through 2021, to evade income taxes on about $5.2 million of his income. 

Conner admitted to promoting the abusive trust tax shelter in concert with the following individuals, among others: a Colorado couple, Timothy McPhee and Marcia Predmore; a Nevada Certified Public Accountant, Weldon Wulstein; a Wyoming-based bookkeeper, Suzanne Thompson; a Mesquite, Nevada man, Roderick Prescott; and an Arizona-based tax preparer, Kent Ellsworth. Conner and his co-conspirators’ caused the filing of false tax returns fraudulently sheltering approximately $156 million in income, which resulted in an approximate tax loss to the IRS of $43 million. 

McPhee previously pleaded guilty to conspiracy to defraud the United States, tax evasion, and, in a separate case, wire fraud. He is currently serving a 151-month prison sentence. 

In a separate five-week trial taking place throughout May-June 2026, a jury found Predmore, Wulstein, Thompson, and Prescott guilty of conspiracy to defraud the United States and other tax-related felonies. All four are scheduled to be sentenced in January 2027. 

Kent Ellsworth pleaded guilty to two counts of aiding and assisting in the preparation of a materially false and fraudulent tax return and is pending sentencing in the District of Arizona on Dec. 7. 

Conner pleaded guilty to conspiracy to defraud the United States. He is scheduled to be sentenced on Jan. 26, 2027, and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. 

Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division made the announcement.

IRS Criminal Investigation investigated the case. 

Lauren K. Pope and Amanda R. Scott, both formerly of the Criminal Division’s Tax Section, prosecuted the case. 

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (Fraud Division). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

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Security News: Pensacola Woman Indicted for Arming a Convicted Felon

Source: United States Department of Justice

Pensacola, Florida – Razhane Harrison, 31, of Pensacola, Florida, has been indicted in federal court for transfer of a firearm to a prohibited person. The indictment alleges that Harrison disposed of a Glock 9-millimeter pistol to convicted felon Marcellous Likely-McWilliams III, who pleaded guilty earlier this month to possession of marijuana with intent to distribute, possession of a firearm by a convicted felon, and possession of a firearm in furtherance of a drug trafficking crime. 

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Colombian Citizen Sentenced to Federal Prison for Adopting the Identity of a U.S. Citizen to Obtain a Passport and to Vote in an Election

Source: United States Department of Justice Criminal Division

Jacksonville, Florida – Carlos Felipe Jaramillo Grajales (55, Jacksonville) was sentenced by U.S. District Judge Harvey E. Schlesinger to three years in federal prison for making false statements in an application for a U.S. passport, aggravated identity theft, falsely claiming that a Social Security number had been assigned to him, and falsely claiming to be a U.S. citizen to vote in an election. The court also entered a Judicial Order of Removal directing that Jaramillo Grajales be removed to Colombia. U.S. Attorney Gregory W. Kehoe made the announcement.

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Assistant Attorney General Colin M. McDonald Issues Memorandum on the National Fraud Enforcement Division’s Enforcement Priorities

Source: United States Department of Justice

Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division (the Fraud Division) today released a memorandum regarding the Division’s enforcement priorities. 

Read the full memo.

The Fraud Division has a clear mission: to prosecute fraud in the United States, no matter its size or complexity. This mission is critical to restoring public confidence in the federal government’s ability to responsibly steward taxpayer dollars. The Government Accountability Office recently estimated that the federal government loses between $233 billion to $521 billion annually to fraud — with other models showing even higher annual losses. Accordingly, Fraud Division personnel will work tirelessly to bring to justice individuals and corporations who have defrauded the public fisc, and threaten the health, safety, security, and prosperity of Americans.

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New Jersey Man Pleads Guilty to Accessing Child Sexual Abuse Material

Source: United States Department of Justice

A Hasbrouck Heights, New Jersey, man pleaded guilty in federal court yesterday to accessing with intent to view child sexual exploitation material involving a prepubescent minor.

“The Department of Justice is committed to unmasking child predators and holding them accountable for their devastating crimes,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Yesterday’s guilty plea is another step forward in the continued fight against the evil of child sexual exploitation. As long as this threat to children remains, the Department’s prosecutors and law enforcement partners will work tirelessly to hold responsible those who facilitate the supply as well as the demand.”

“Yesterday’s guilty plea is a bittersweet victory, as it acknowledges the victimization of the children depicted in the materials the offender possessed,” said Special Agent in Charge Stefanie Roddy of the FBI’s Newark Field Office. “The FBI will continue its relentless quest to identify and stop those who abuse and exploit children.” 

According to court documents, Abhishek Vijayakumar, 43, knowingly accessed the illicit material in March 2024. Law enforcement subsequently discovered more than 200 images of children engaged in sexually explicit conduct, including imagery of an approximately three-year-old child being sexually abused by an adult male, when reviewing his electronic devices.

Vijayakumar faces a maximum penalty of 20 years in prison when he is sentenced on Jan. 6, 2027. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

FBI Newark is investigating the case and received valuable assistance from the Bergen County (New Jersey) Prosecutor’s Office Cyber Crimes Unit.

Trial Attorney Jessica L. Urban of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) is prosecuting the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, visit www.justice.gov/psc.

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Defense News in Brief: Hegseth renames Joint Base Charleston to honor late Sen. Lindsey Graham

Source: United States Airforce

JOINT BASE LINDSEY GRAHAM, S.C. (AFNS) —  

Joint Base Charleston, South Carolina, became Joint Base Lindsey Graham during a ceremony Aug. 10 to rename the installation after the late senator, Air Force veteran and South Carolina native son.

 

More than a dozen people in camouflage military uniforms pose for a photo in a hangar with a man in a suit as they stand in front of and on top of a military vehicle.
Secretary of War Pete Hegseth poses for a photo with service members at Joint Base Lindsey Graham, S.C., Aug. 10, 2026, after the base renaming ceremony.

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Secretary of War Pete Hegseth joined South Carolina Gov. Henry McMaster and Sen. Darline Graham of South Carolina to dedicate the 32-square-mile installation, home to the 437th Airlift Wing, which provides global airlift capability to the joint force with the C-17A Globemaster III aircraft.

 

Lindsey Graham served as a U.S. senator from South Carolina from January 2003 until his passing July 11. He also served as a lawyer and commissioned officer in the Air Force’s Judge Advocate General Corps, first on active duty from 1982 until 1988, then as a member of the South Carolina Air National Guard until 1995 and finally, in the Air Force Reserve until 2015.

“Sen. Lindsey Graham dedicated his life to serving this state and serving the armed forces of the United States,” Hegseth said. “He served this nation both in uniform and in both houses of Congress. … But in both capacities, it was always the same mission. He knew the timeless truth that to ensure peace, we must be prepared for war. Protect your people, protect your state, protect your sovereignty, or you will lose it to someone else who is willing to take it from you.”

Hegseth said he first met Graham as a young first lieutenant in the Army. Hegseth had returned from Iraq and had aligned himself with a veterans group called “Vets for Freedom.”

“[We] believed in the surge in Iraq and advocating for the troops on the ground,” he said. “We were a young, scrappy veterans’ organization with no money and no access and connections.”

 

A person in camouflage and an orange reflective vest waves a flag in each hand while facing a transport aircraft on a runway.
An airman assigned to the 437th Airlift Wing marshals a C-17 Globemaster III aircraft onto the runway at Joint Base Charleston, S.C., July 27, 2026. The base was renamed Joint Base Lindsey Graham Aug. 10, 2026.

Only one senator, Graham, was willing to meet with Hegseth and other representatives of the group.

 

“He welcomed us into his conference room, sat us down as a bunch of lieutenants and [noncommissioned officers] and others around the table — fresh back from Iraq — who wanted the right strategy,” Hegseth said. “He said, ‘Gentlemen, welcome to a place where you can still say the word victory.’ He believed in mission success; he believed in the troops; he believed in giving the troops everything they needed.”

In later years, Hegseth said he recalled mentioning to Graham that he was now serving as an instructor at a counterinsurgency school in Kabul, Afghanistan.

“I had mentioned that we … could give him an update on what the Taliban was up to,” he said. “Sure enough, during his reserve duty, there he was — jet-lagged as all hell — because that man had a schedule like nobody else. But he was there to hear from us because he wanted his ear to the ground from the troops on what was actually happening in the war in Afghanistan.”

Just weeks before the senator’s passing, Hegseth said he met with Graham to discuss the War Department budget — the current request, $1.5 trillion, is the largest in U.S. history. The senator showed his commitment to troops there, too.

“[He asked], ‘Mr. Secretary, what do you need for reconciliation?'” Hegseth said.

Secretary of War Pete Hegseth speaks during the base renaming ceremony of Joint Base Charleston, S.C., Aug. 10, 2026. The base is being renamed for the late Sen. Lindsey Graham, an Air Force veteran.

Hegseth said he discussed with Graham that he thought the department needed $1.15 trillion in the base budget and $350 billion in reconciliation to get to the needed $1.5 trillion total budget.

 

“He looked at me and said, ‘How’s $355 billion sound to you?'” Hegseth said. “He wanted to give even more than $350 [billion]. He wanted to ensure our military was as equipped as humanly possible, because he was thinking of places like this one right here.”

Graham, Hegseth said, knew what was needed to keep America safe.

“I saw firsthand as a young first lieutenant, as a captain in a combat zone and as a secretary, the unwavering commitment of Lindsey Graham,” Hegseth said. “He knew that if you’re going to seek peace, you have to be prepared for war. You have to have a prepared military. He talked the talk, and he walked the walk.”

Darline Graham took on his role as senator following her brother’s passing. She said he was proud of his service in the Air Force.

“What an honor for my brother, and what a tribute to his 33 years of service,” Graham said. “Lindsey loved the Air Force. He loved its mission. He loved wearing the uniform of his country. His interest in foreign affairs and national security started with his service in the Air Force.”

Dozens of people in camouflage military uniforms and business attire stand around a military vehicle in a hangar as a man in a suit speaks to them.
Secretary of War Pete Hegseth speaks to service members following the base renaming ceremony at Joint Base Lindsey Graham, S.C., Aug. 10, 2026.

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A person applauds by a large rectangular sign reading "U.S. AIR FORCE Joint Base Lindsey Graham" outdoors.
The sign for Joint Base Lindsey Graham is unveiled at the base in South Carolina, formerly called Joint Base Charleston, Aug. 10, 2026.

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A man in a suit shakes hands with a man in a military camouflage uniform as other people in similar attire look on.
Secretary of War Pete Hegseth shakes hands with a service member at Joint Base Lindsey Graham, S.C., Aug. 10, 2026, after the base renaming ceremony.

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Lindsey Graham initially served in state government as a member of the South Carolina House of Representatives. Later, from 1995 to 2003, he served in the U.S. House of Representatives, representing South Carolina’s 2nd District. And finally, he served as a U.S. senator from South Carolina, beginning in 2003.

 

“It was sometimes hard to tell if Lindsey was a senator who happened to serve in the Air Force or an Air Force lawyer who happened to serve in the Senate,” his sister said. “Such was his love for both. That’s the man this base is named after — a man who loved his country, loved his state and loved the United States Air Force. I could not be more honored or humbled for him to be recognized in such a fashion for his lifetime of service.”

Following the renaming of the installation, Hegseth met with Airmen assigned to the 437th Airlift Wing as well as other troops on the installation who had been involved with Operation Epic Fury, the mission to destroy Iranian offensive missiles and missile production, as well as the Iranian navy and other security infrastructure.

While meeting with airmen, the secretary discussed the importance of logistics. He commended them on their improvements to logistics capabilities and how their unit is contributing to the modernization of the U.S. military.

“Look at what the 437th is doing as the premier maneuver force for the C-17A modernization: leading operational testing for things like palletized munitions, drastically increasing our airborne munitions capacity in future conflicts,” he said. “I’ve been watching. I read the reports of how you iterate, do things faster in congested logistics. It’s incredible, the backbone of what you have enabled in the theater.”

Logistics, Hegseth said, is how wars are won, adding that it’s airmen at Joint Base Lindsey Graham who are making that happen.

“The secret sauce of any successful mission — whether it’s Epic Fury, Southern Spear, Midnight Hammer, Absolute Resolve, Hawkeye Strike, you name it — are the logistics behind it,” he said. “That’s the genius of the United States military.”

Secretary of War Pete Hegseth meets with service members after a base renaming ceremony at Joint Base Lindsey Graham, S.C., Aug. 10, 2026

The secretary said it’s the strategic lift, the U.S. Transportation Command, logistics, how the U.S. moves things, people, munitions and capabilities that make a difference.

 

“No one else can touch it, not even close,” Hegseth said, adding that, “All of it is enabled by all of you, incredible Americans at the top of your game, at the prime of your life. … I consider all of you the real 1%, the real elite who give absolutely everything.”