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Buffalo Financial Advisor Pleads Guilty to Tax Evasion Scheme
A former financial advisor from Upstate New York has pleaded guilty to using and selling abusive trust schemes to obstruct the Internal Revenue Service (IRS), federal authorities announced today.
Richard A. Muto, 62, of Lewiston, N.Y., pleaded guilty to corruptly endeavoring to obstruct and impede the administration of the internal revenue laws, as charged in a federal indictment filed in December 2005.
According to the indictment and documents filed in the district court, Muto, who owned and operated Tax and Investment Strategies in Niagara Falls, N.Y., promoted abusive tax shelters involving a multi-layered trust scheme from February 1996 to March 2000.
The scheme allowed clients to illegally reduce their federal income taxes by diverting business income through sham corporations and trusts, concealing their true income from the IRS. This resulted in an unlawful reduction in reported taxes by his clients, causing a tax loss to the United States of more than $1.7 million.
Muto also advised clients to submit frivolous documents and correspondence to the IRS to obstruct audits and thwart revenue agents. He even utilized the trusts himself, filing false income tax returns for the years 1996, 1997, and 1998.
The charge against Muto carries a maximum sentence of up to three years in prison and up to one year of supervised release. He is scheduled to be sentenced on May 9, 2011.
“The IRS and the Justice Department will continue to investigate and prosecute people who use schemes and scams to obstruct our nation’s tax system,” said Acting Assistant Attorney General for the Justice Department’s Tax Division, John A. DiCicco. He thanked the IRS Criminal Investigation agents who investigated the case and Tax Division trial attorneys John N. Kane and Jeffrey Shih who prosecuted the case.
This prosecution is one of several against The Aegis Company, an Illinois-based firm that promoted nationwide trust schemes, with whom Muto had a business relationship. In May 2008, a federal jury in Chicago convicted six Aegis principals for their role in the scheme.
Key Facts
- State: Federal
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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