JUSTICE DEPARTMENT SUES TO BLOCK ALLEGED TAX SCAM IN TEXAS

The following press release was published by the US Department of Justice on April 28, 2004. It is reproduced in full below.

FOR IMMEDIATE RELEASE WEDNESDAY, APRIL 28, 2004 WWW.USDOJ.GOV TAX (202) 514-2008 TDD (202) 514-1888 WASHINGTON, D.C.-The Department of Justice today filed a civil injunction suit in federal court in Fort Worth, Texas, to stop Marlene and Timothy Mitchell of Euless, Texas, and their business, “Premier Trust Services,” from promoting an allegedly illegal tax scheme involving the use of abusive trusts to evade federal income, gift, estate, and self-employment taxes.

According to the complaint, filed in the U.S. District Court for the Northern District of Texas, the Mitchells charge customers $12,000 for sham trust packages designed to help customers attempt to evade federal taxes. Court papers allege that while the Mitchells’ programs are ostensibly designed for “Christian stewardship,” the trusts are actually used for tax evasion.

The lawsuit alleges that while the Mitchells now promote the scam on their own, Marlene Mitchell got her start in the abusive trust tax scam business with “National Trust Services,” an organization run by Roderick A. Prescott. In June 2003, Prescott and his business were permanently barred from promoting abusive trust schemes. Information regarding the Prescott lawsuit can be found at: The court papers also allege that Charles Chung provided accounting services including tax return preparation for the Mitchells’ customers. In September 2003, a federal court in Oklahoma permanently enjoined Charles Chung from preparing returns based on abusive trust arrangements. More information on the Chung lawsuit can be found at “The Justice Department is committed to shutting down tax fraud schemes,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “Promoters of tax fraud schemes will face injunctions, penalties, and, where appropriate, criminal charges.” This suit is the latest in a series of actions filed by the Justice Department to shut down the promotion of abusive trusts. Information about similar civil cases and criminal cases involving abusive trusts can be found at: 04-275

Source: US Department of Justice