Nelsons Found Guilty of Tax Crimes

Two Letcher men, Theodore ‘Ted’ J. Nelson, Jr., 67, and his son, Steven A. Nelson, 45, have been found guilty of tax crimes following a federal jury trial in Sioux Falls, South Dakota. The verdict came after a two-week trial that commenced on May 5, 2015, and concluded on May 12, 2015.

The Nelsons were indicted by a federal grand jury on April 8, 2015, on multiple charges, including conspiracy to defraud the United States, failure to file income tax returns, and impeding the Internal Revenue Service. Ted Nelson faced one count of conspiracy, six counts of failure to file income tax returns, and one count of impeding the IRS. His son, Steven Nelson, faced one count of conspiracy, seven counts of failure to file income tax returns, and one count of impeding the IRS.

The conspiracy charge carries a maximum penalty of 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. Each failure to file income tax return carries a maximum penalty of 1 year in custody and/or a $1,000 fine, no supervised release, a $25 special assessment to the Federal Crime Victims Fund, costs of prosecution, and restitution. The impeding count carries a maximum penalty of 3 years in custody and/or a $5,000 fine, 1 year of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.

The Nelsons, who inherited a family farm and business, created over 30 trusts, corporations, LLCs, and other entities to hide their ownership of the farm and its income. They also opened a series of bank accounts using false tax identification numbers and Social Security numbers. The father and son duo stopped filing income tax returns after 1998 and 1996, respectively.

Assistant U.S. Attorneys John E. Haak and Ann M. Hoffman prosecuted the case, which was investigated by the Internal Revenue Service – Criminal Investigation. A presentence investigation has been ordered, and a sentencing date has been set for August 17, 2015. Ted Nelson was remanded to the custody of the U.S. Marshals Service, while his son, Steven Nelson, was released pending sentencing.

The case highlights a complex web of deceit and financial manipulation, as the Nelsons attempted to evade taxes on their substantial income from the family farm and business.

As the sentencing date approaches, the Nelsons face a range of penalties, including imprisonment, fines, and restitution. The guilty verdict serves as a warning to those who attempt to cheat the system and highlights the importance of tax compliance and transparency.

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