Steven W. Allen, Tax Evasion, Arizona 2004

A Phoenix attorney and two accountants have been charged with participating in a complex tax evasion scheme, using offshore trusts to hide millions of dollars in income from the IRS.

According to court documents, Steven W. Allen, a prominent Phoenix attorney, pleaded guilty to taking part in a conspiracy to defraud the IRS by promoting a fraudulent offshore trust scheme to hide his clients’ income.

Allen’s co-defendants, Allen P. Goodmansen and Charles D. Kober, both certified public accountants, also pleaded guilty to participating in the scheme. Goodmansen admitted to preparing false trust tax returns to create the appearance that his clients’ income belonged to their trusts.

The scheme, which ran from 1997 to 2004, involved setting up a series of offshore trusts in which Allen’s clients hid their income from the IRS. Allen charged his clients between $10,000 and $30,000 to set up the trust packages.

Goodmansen and Kober also prepared fraudulent personal tax returns for some of their clients, omitting the income that the clients hid through the foreign trusts. To hide the fact that the scheme was taking place in Arizona, Allen caused the false trust tax returns to be mailed to the IRS from outside the United States. However, none of the clients’ money or other assets were outside of the United States.

The indictment and plea agreements state that Allen, Goodmansen, and Kober face significant prison time and fines. Allen and Goodmansen face a maximum sentence of five years in prison and a fine of $250,000. Kober faces a maximum sentence of three years in prison and a fine of $250,000.

This case was investigated by IRS Criminal Investigation in Phoenix, and is being prosecuted by Tax Division Trial Attorneys Monica B. Edelstein and Michael J. Romano.

The guilty pleas bring an end to a complex and widespread tax evasion scheme, which was uncovered through the tireless efforts of law enforcement and prosecutors.

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