When I think of a law school, I think of a university teaching students how to be attorneys. My cousin is a professor at the University of Chicago Law School; that’s a law school. That’s not what I’m writing about today.
From Point Richmond, California comes the story of Richard Thomas Grant. Mr. Grant was a partner in an engineering firm in Richmond (in the San Francisco Bay Area). Back in 2001, he stopped filing personal tax returns. In 2003, he stopped filing partnership tax returns for his partnership (although he still paid a tax professional to prepare those returns). Mr. Grant joined “Freedom Law School.”
I had never heard of this law school, but perhaps I should have. Back in 2015, Joe Krsitan had this to say about it:
Through its conferences, materials, and service packages, the Freedom Law School promoted various techniques for evading the payment of federal income taxes. The techniques included:
-Minimize financial records.
-Do not give information to the IRS.
-Do not file tax returns.
And it also offered multi-level marketing opportunities!
Freedom Law School notes its victories and, their web site still states,
There is no statute that makes any American Citizen who works and lives in the United States of America liable or responsible to pay an income tax. Individuals only become liable to pay the income tax when they “VOLUNTARILY” file a tax return and the IRS follows their assessment procedures as outlined in the Internal Revenue Code.
Hint: This is still snake oil advice. If you follow it and you make substantial income, ClubFed will be in your future. Mr. Grant likely wishes he had never heard of Freedom Law School. I’ll let the DOJ press release continue with the case:
While the Internal Revenue Service (IRS) attempted to collect unpaid taxes owed by Grant for 2001 and 2002, and attempted to examine Grant’s taxes for subsequent years, Grant, with the assistance of Freedom Law School and its founder, Peymon Mottahedeh, attempted to frustrate the IRS’s actions by, among other things, filing multiple and ultimately unsuccessful law suits in various jurisdictions.
For the charged years 2005 through 2009, Grant’s partnership income was $509,339, $566,741, $486,062, $598,977 and $604,706, respectively.
So what did Mr. Grant do? He hid his funds in a warehouse bank. That only worked for a few years; he then converted his funds to cash and cashier’s checks.
After the federal government shut down MyICIS, Grant used another bank to convert his partnership distributions to cashier’s checks and cash in order to avoid depositing the funds into a bank account and used the cashier’s checks to pay his mortgage and other high-dollar personal expenses. He also used cash to purchase dozens of U.S. Postal money orders to pay other bills and expenses, including utilities, taxes and expenses related to his classic aircraft.
I’m sure his mortgage company issued a Form 1098 to report his mortgage interest paid. Although not noted in the press release, I’m certain IRS Criminal Investigation contacted the mortgage company; they were able to produce the cashier’s checks that were used. And then it was a simple procedure to find out how Mr. Grant paid for those cashier’s checks.
Earlier this year Mr. Grant was found guilty of three counts of tax evasion. Last week he was sentenced to 33 months at ClubFed plus he must make restitution of $402,457.39. He’ll also have to serve three years of supervised release.
Mr. Grant paid “thousands of dollars” in yearly membership fees to avoid timely paying his taxes. That got him…very little unless you want to spend 33 months behind bars.