In what is described as its largest show of force, the IRS has executed more than three dozen search warrants in investigations of illegal offshore trusts and other tax evasion schemes. Between Oct. 1, 2000 and Feb. 28, 2001, the IRS initiated 21 criminal investigations to combat abusive trusts.

The most recent came to light last week with the announcement in Boston of money-laundering charges against six individuals. Four have been taken into custody. Those individuals were charged in a Boston federal court with conspiracy to launder $470,000, most of it through an illegal offshore trust to avoid paying U.S. taxes on the funds.

According to the U.S. Attorney's office in Boston, the defendants who have been arrested are Wayne Anderson of Squaw Valley, Calif.; Richard Marks of Los Osos, Calif.; Richard Castellini of Bridgeton, N.J.; and Michael Gonet of Stow, Mass. Keith Anderson of Santa Ana, Costa Rica and Karolyn Grosnickle of Hoodsport, Wash. are now considered fugitives. If convicted, the defendants face 20 years in prison and a fine of up to $250,000.

The six were principals in or referred clients to an illegal offshore trust operation known as Anderson Ark & Associates in Costa Rica, according to the U.S. Attorney. The trust program was set up to make it appear that the funds were neither owned nor controlled by the clients.

According to the complaint, the defendants unknowingly assisted an IRS undercover agent launder money that he said was the proceeds of bankruptcy fraud and bank fraud. The complaint further alleges that certain defendants told the IRS agent that they laundered money for other people in the past.

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

In an unrelated investigation, the IRS executed a search warrant in Manhattan Beach, Calif. in connection to an alleged offshore trust scheme promoted by Jerome Schneider.

IRS spokeswoman Michelle L. Eldridge said there have been no new arrests since last week's action.

-- By Dan Engel

Send comments to dane@pro2net.com.

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