Creator of program that defrauded IRS gets federal prison time

A key player and government witness in a massive tax fraud scheme that victimized thousands of people across the country was given a stiff federal prison term on Thursday.

Daniel Porter, 62, whose trial testimony last year helped convict three other major players in the conspiracy, was sentenced to 55 months behind bars and ordered to serve three years of supervised release after prison.

U.S. District Judge Miranda Du ordered him to surrender to prison authorities on July 10.

The scheme, which federal prosecutors said took place between 2001 and 2004, involved the now-defunct Las Vegas company the National Audit Defense Network. The company was accused of selling an Internet package, dubbed Tax Break 2000, to help its clients claim improper tax deductions.

The Justice Department once estimated that the losses to the Internal Revenue Service were more than $324 million, though that figure has since been scaled back to more than $60 million.

Porter, who began cooperating with federal authorities early in the investigation, pleaded guilty in 2007 to one count of conspiracy to defraud the United States. He was regarded as the creator of Tax Break 2000.

His defense lawyer had sought probation and home confinement for Porter, who told Du he was “deeply sorry” for his actions.

But Du decided on the prison sentence, saying it was clear that Porter demonstrated a “pattern of fraudulent conduct” over the past several years while waiting to be sentenced.

The judge also said she didn’t think Porter was “entirely truthful” on the witness stand during the lengthy trial of the other three defendants — former NADN General Manager Alan Rodrigues, former NADN Chairman Weston Coolidge, and marketing agent Joseph Prokop. All three were convicted last May on several charges, including conspiring to defraud the IRS.

In March, Du sentenced the three defendants to federal prison terms and ordered them to share in the restitution of more than $35 million to the scheme’s victims. Du did not order restitution for Porter on Thursday.

Rodrigues, 55, the former owner of two small North Las Vegas casinos, was sentenced to six years in prison. He was arrested in February in Las Vegas after authorities alleged he was trying to flee to Mexico.

Coolidge, 70, a onetime Las Vegas businessman, was sentenced to 70 months behind bars, and Prokop, 54, a former NFL punter who worked for a California company that sold Tax Break 2000 to NADN, was sentenced to 18 months in prison. He also was ordered to serve 30 months of home confinement after prison.

During the trial, prosecutors contended that Tax Break 2000 allowed customers to claim up to $10,475 in income tax credits and deductions under the Americans With Disabilities Act. Many customers ended up being audited by the IRS.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135. Find him on Twitter: @JGermanRJ.