Friday, November 3, 2006
Two Former Valencia Attorneys Sentenced to Prison For Conspiracy to Promote Tax Fraud Scheme
By TINA BAY, Staff Writer
A federal judge in Utah yesterday sentenced former California lawyers Martin D. Arnoldini and Jerrold B. Boschma to 53 months in prison for promoting a tax fraud scheme through the use of trusts and foreign bank accounts, the Department of Justice said in a news release.
In addition to prison time, U.S. District Judge Ted Stewart ordered the pair to serve three years of supervised release upon the completion of their imprisonment and to pay restitution in the amount of $900,000.
Arnoldini and Boschma pled guilty in April 2004 to charges of conspiring to defraud the United States and commit mail and wire fraud in connection with promoting a tax fraud scheme. Required by their plea agreements to surrender their law licenses,
the former law partners resigned from the State Bar with charges pending in November 2004.
In their plea agreements, the two admitted that starting in 1997, they marketed and sold a fraudulent “trust” scheme through Century Law Offices, as licensees of World Contractual Services, and later through CornerStone West.
They and nine others promoted the scheme through seminars, opinion letters and other materials that lied to customers that they could lawfully reduce their tax liabilities by transferring their businesses, homes, investments and other assets into a trust, the plea documents said.
Nancy Jardini, IRS Criminal Investigation Chief, commented in a statement:
“Concealing income from the government through the use of fraudulent trust arrangements is not financial planning; it’s criminal activity. Those who promote these activities or willfully invest in these schemes will be held accountable.”
One of the IRS’s enforcement priorities is ensuring that lawyers, accountants and other tax practitioners adhere to professional standards and follow the laws, she pointed out.
Arnoldini and Boshma admitted their schemes cost the U.S. Treasury nearly $3.6 million in lost tax revenue.
They further admitted participating in fraudulent offshore investment schemes that resulted in a loss of approximately $1.3 million to their customers.
The nine others charged as co-conspirators in the fraud scheme include two attorneys, a CPA and former IRS agent who have all pled guilty to the charges against them.
Arnoldini and Boschma both received law degrees from San Fernando Valley College of Law in Woodland Hills. Boschma was admitted to the State Bar in 1980 and Arnoldini, who also holds an advanced degree in taxation, became a State Bar member in 1983.
Eileen J. O’Connor, Assistant Attorney General for the DOJ’s Tax Division, said
tax professionals who help others commit tax evasion pay a “steep price” for their crimes.
“They forfeit not only the privilege of their professional livelihood, but also their liberty when they are sentenced to prison,” she added.
Arnoldini is a graduate of Ohio State University.
Boschma graduated from William Paterson College in New Jersey.
Copyright 2006, Metropolitan News Company