A federal court in Salt Lake City has sentenced a trio of men to more than 29 months in jail in connection with the promotion and sale of a tax and investment fraud scheme to more than 300 clients.All three defendants pleaded guilty to a felony charge of conspiracy to defraud the United States and to committing mail and wire fraud in connection with the promotion of the tax and investment fraud scheme.
The scheme’s lead promoter, David J. Orr, received a term of 60 months in prison, while former attorneys Todd Cannon and Michael Behunin, were sentenced to 63 months, and 29 months, respectively. All three defendants will have to serve three years of supervised release upon the completion of their jail terms.
The men, along with Lanny White (who pleaded guilty in November 2006), and CPA Max Lloyd, were indicted in April 2003.
According to papers filed with the court, Orr was the lead promoter, salesperson and organizer for the fraud scheme. He admitted that his actions had cost the federal Treasury between $5 million and $10 million in lost tax revenue, and that he obtained between $5 million and $7 million from clients by misrepresenting his investment experience and the expected return.
But it was Cannon was also ordered to pay more than $1.2 million in restitution.
The attorney was legal counsel for the scheme and falsely represented to clients that the trust scheme was legal. He admitted that his actions cost the federal Treasury almost $3 million in lost tax revenue.
In turn, Behunin prepared numerous false tax returns costing the federal Treasury between $950,000 and $1.5 million in lost tax revenue and also admitted to participating in a fraudulent railroad bond investment scheme, causing clients to lose between $350,000 and $450,000.
Eleven individuals, including four attorneys and one CPA, have pleaded guilty in this case.
