I remember Hawaii Five-O, the long running police show that starred the late Jack Lord. This post looks at four individuals who allegedly created an illegal tax fraud scheme.
The US Department of Justice filed suit against four individuals and two businesses in Hawaii, alleging that they created a series of sham transactions using business insurance and retirement accounts to create phony tax deductions. The suit alleges that the loss to the Treasury is over $2 million.
The alleged transactions first sent the money to offshore accounts and then moved the money back using, among other methods, sham loans and foreign credit cards. The suit alleges that the individuals got to deduct 100% of the money that was moved but received 80% of it back. That’s a neat (and if proved, illegal) trick.
The accused businesses are Bright Enterprises, a Lihue, Hawaii accounting firm and Hawaii Financial Specialists, Inc.. The DOJ is asking for an injunction to stop the practice and, undoubtedly, a list of clients who used this scheme. Remember, if you get a business deduction for an expense, you’re supposed to have spent 100% of the money, not 20%.
News Story: Honolulu Star-Bulletin