A former Colorado lawyer has admitted his involvement in a scheme to help people hide their assets from the Internal Revenue Service and has agreed to pay more than $40 million in restitution.
William S. Reed, 61, of Santa Barbara, Calif., appeared Monday before Senior U.S. District Judge Philip Pro in Las Vegas and pleaded guilty to the following charges: conspiracy to defraud the United States, aggravated identity theft, and attempted tax evasion.
Pro is scheduled to sentence the defendant, who faces up to 12 years in prison, on May 14.
Reed was indicted in July with Wendell L. Waite and Richard Neiswonger. The other two defendants are awaiting trial.
According to the indictment, the defendants were involved in a scheme from about 1998 to 2006 to enrich themselves through the sale of services and products that would help people hide their assets from the IRS and creditors.
Reed is a former Colorado attorney whose license to practice in that state was suspended in 1997 for engaging in misrepresentations and dishonesty, according to his plea memorandum.
He authored the book "Bulletproof Asset Protection" and owned at least one residence in Las Vegas.
Waite, a certified public accountant, and Neiswonger both lived in Las Vegas.
According to Reed's plea agreement, he and Neiswonger formed Asset Protection Group in Nevada in 1998. From 1999 to mid-2006, the company operated from an office in Las Vegas.
Asset Protection Group sold a business opportunity training program to at least 1,000 people for about $10,000 each. Those who purchased the program became consultants and sold the service to clients who wanted to conceal assets. In turn, the consultants received a portion of the fees paid by the clients.
The company's "asset protection" services included creating domestic corporations and offshore international business companies with obscured ownership.
According to a statement released Tuesday by the U.S. attorney's office in Las Vegas, Asset Protection Group created about 2,500 "disguised ownership" corporations in Nevada for $795 each.
"During 2003 to 2006, APG allegedly received over $63 million in deposits and made over $62 million in withdrawals through one of its bank accounts, and sent over $11 million offshore," according to the statement.
The Federal Trade Commission intervened in the company's operations in July 2006. The following year, a federal judge in Missouri issued a permanent injunction that prohibited the company from marketing its business opportunity training program.
Reed's plea agreement requires him to pay about $34.4 million in restitution to the IRS and about $5.8 million in restitution to the FTC.
Contact reporter Carri Geer Thevenot at firstname.lastname@example.org or 702-384-8710.