Tax fraud promoter Paul D. Harris was sentenced in U.S. District Court in Denver to five-and-one-half years in prison, followed by three years of supervised release, the Department of Justice and Internal Revenue Service said.
Harris was also ordered to pay more than $10,000 towards the costs of prosecution in connection with his role in an offshore tax scheme, marketed as Tower Executive Resources in Colorado.
In April 2005, a federal jury convicted Harris of conspiring to defraud the United States and willfully aiding and assisting in the preparation of a fraudulent income tax return, after a six-week trial. Co-defendant Lester R. Retherford was sentenced in December to four years in prison.
According to prosecutors, wealthy taxpayers paid initiation fees of up to $50,000 to join Tower Executive Resources and thousands more in annual fees to maintain their membership. Harris and Retherford set up shell corporations for their clients that were used to conceal nearly $9 million in taxable income. The clients transferred millions of dollars to secret bank accounts in the Turks and Caicos Islands and other foreign countries.Harris and Retherford made it appear as though the offshore transfers were payments for consulting services, which the clients then falsely deducted on their businesses' tax returns. The clients then used debit cards and bogus loans to bring the money they had transferred offshore back into the United States for their own personal benefit. Nine clients of Tower Executive Resources from across the country have been convicted of tax offenses and three additional clients are currently under indictment.
