Mastermind Executes Massive Tax Shelter Fraud Scheme, Ripping $45,000,000 From US Government: DOJ - The Daily Hodl

A man from Colorado is pleading guilty to masterminding a tax shelter fraud scheme that stole tens of millions of dollars from the US government.

In a new press release, the U.S. Department of Justice (DOJ) says that between 2018 and 2023, Timothy McPhee promoted a fraudulent tax shelter that helped those who purchased it evade paying federal taxes on their income.

According to the DOJ, McPhee would instruct clients to assign most of their business income to trusts to conceal their origins and spend money in the trust bank accounts on personal expenses and fraudulently report them as deductions to greatly reduce their taxable income.

Authorities found that McPhee’s illegal tax shelter caused the US government to miss out on $45 million worth of unpaid taxes. Furthermore, he was found to have concealed $5 million worth of earned income between 2016 and 2021 personally, resulting in $1.8 million worth of unpaid taxes.

The DOJ also says that between January 2023 through May 2024, McPhee ran an investment scheme called the “ROI Cash Flow Fund,” which promised investors a 3% monthly payout on their principal investment by sending funds to a third-party borrower who was supposed to engage in foreign currency trading.

However, instead of sending the funds, McPhee would embezzle them to make the promised 3% monthly payouts and use them on his own personal expenses.

McPhee is scheduled to be sentenced on October 23rd and faces a maximum of 30 years behind bars if convicted of his charges, which include conspiring to defraud the United States, wire fraud, and tax evasion.

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