courts:

Las Vegas man accused in $31 million tax fraud scheme

Wednesday, June 24, 2009 | 2:57 p.m.

Download a copy of the complaint, U.S. v. Sommerstedt, et al.

A federal court has barred a Las Vegas man accused of coordinating a tax fraud scheme that cost the Treasury Department an estimated $31 million in lost revenue from continuing to promote his services.

Reinhold Sommerstedt is being sued by the Justice Department for allegedly creating false domestic and foreign trusts so his clients could conceal their assets from the IRS by moving them to offshore bank accounts in the West Indies, according to court documents. Customers allegedly paid as much as $14,500 for the phony trusts.

The injunction, granted by the U.S. District Court for the District of Nevada, also requires Sommerstedt to give the government a full list of the names, addresses, e-mail addresses, telephone numbers and Social Security numbers of more than 180 clients, according to a statement released by the Justice Department today.

Sommerstedt argued that an injunction was unnecessary and said he would voluntarily refrain from the allegedly fraudulent activities, but the court issued the injunction based on its findings that this was “not an isolated act of misconduct” and that Sommerstedt has "never acknowledged the wrongfulness of his actions,” the statement said.

Sommerstedt’s business partners -- Daniel Young, of Las Vegas, who allegedly created phony trusts to move customers’ assets to banks in the West Indies; Lynn Lakers, a Boulder City tax-return preparer who allegedly prepared false tax returns for the phony trusts; and Stephen Nestor, a former IRS revenue officer from Boise, Idaho, who allegedly signed the false tax returns -- have already consented to permanent injunctions.

Lakers, Nestor and Young are listed as co-defendants in the Justice Department’s suit.

Discussion: 2 comments so far…

By rejco100

6/24/09 at 4:40 p.m.

Suggest removal

Are there ANY rich people who ARE NOT crooks? For Heaven's sake, LV has homeless people in jail just for being homeless!
By KillerB

6/24/09 at 5:59 p.m.

Suggest removal

rejco100 -- where do you get that those indicted here are rich?

It's no crime to use trusts or any other entity to save on one's taxes. The tax code, like most federal law, is so bloated, complex and sometimes contradictory, it's virtually impossible to understand. That alone is an indictment of the government we live under -- one is forced to hire an expert for common purposes, like going to court or dealing with government at any level for anything but standing in line.