William S. Reed, a convicted key player in a multimillion-dollar scheme to help people hide assets from the Internal Revenue Service, was sentenced Tuesday to 108 months in federal prison.
Senior U.S. District Judge Philip Pro gave Reed roughly 27 months credit for the time he has served at the Henderson Detention Center since his July 2011 arrest, but ordered him to pay more than $40 million in restitution to the government.
Reed, 63, a former Colorado lawyer who maintained residences in Santa Barbara and Las Vegas, pleaded guilty last year to conspiracy to defraud the United States, aggravated identity theft and attempted tax evasion.
Assistant U.S. Attorney Gregory Damm described Reed in court Tuesday as a “consummate con-artist” who had “defrauded the government out of a lot of money.”
Reed, who authored the book “Bulletproof Asset Protection,” and two other men were indicted in July 2011 in the scheme, which prosecutors alleged took in more than $63 million between 2003 and 2006.
Dressed in jail garb and chains, Reed told Pro from the courtroom podium that his actions were the result of a “perfect storm of bad choices and decisions,” and he vowed to make the rest of his life productive.
He said he has written two life-promoting books while behind bars the last two years, and wants to go on a speaker’s tour when he gets out of prison to help turn around the lives of others.
Reed said he felt “embarrassed” and humiliated” to be standing before the judge with his two adult sons in the courtroom gallery.
“I would like to redeem myself, especially in the eyes of those boys,” he said. “It’s a tragedy, your honor, and it’s my fault.”
At one point, Reed turned around, looked at his sons, and said “I’m sorry guys.”
In handing down the sentence, Pro told Reed that he had “fallen a long way” and that “nobody but you bears responsibility for where you stand today.”
Afterwards, Paul Camacho, special agent in charge of IRS-Criminal Investigation in Las Vegas, praised the tough sentence.
“Simply put, Reed was in the business of hiding money for others using Nevada corporations and offshore bank accounts,” Camacho said “He was a promoter, facilitator and multiplier of criminal activity. But his bullet proof asset protection scheme failed miserably when IRS Criminal-Investigation relentlessly pursued his various money trails.”
Reed, whose license to practice law in Colorado was suspended in 1997 for engaging in misrepresentations and dishonesty, and his co-defendants were accused of enriching themselves as far back as 1998 through the sale of services and products that would help people conceal income from the IRS.
Reed formed the Nevada company, Asset Protection Group, which operated in Las Vegas between 1999 and 2006.
Asset Protection Group sold a business opportunity training program to at least 1,000 people for about $10,000 each, prosecutors alleged.
Those who bought the program became consultants and sold the service to clients who wanted to hide assets. In turn, the consultants received a portion of the fees paid by the clients.
One of Reed’s co-defendants, Richard Neiswonger, 61, pleaded guilty in the scheme last year and agreed to cooperate with federal prosecutors. He is to be sentenced before Pro in February.
Neiswonger, who now lives in Florida, admitted in court that he was responsible for marketing the scheme in advertisements around the country that used actor Robert Wagner as a spokesman.
The advice handed out to people was “shaky at best,” Neiswonger told Pro at the time.
Reed has agreed to cooperate against the other defendant, Las Vegas accountant Wendell L. Waite.
Waite, 72, who is awaiting a January trial, was indicted by a federal grand jury last month with two of his clients in another conspiracy to hide money from the IRS.
Contact reporter Jeff German at jgerman@reviewjournal .com or 702-380-8135. Follow him on Twitter @JGermanRJ.