Two Tampa men have been accused of promoting an offshore tax scheme to defraud the U.S. government over at least a seven-year period, federal officials said.
According to an indictment, Duane Crithfield, 65, and Stephen Donaldson Sr., 67, each face one count of conspiracy to defraud the United States, U.S. Attorney Robert E. O’Neill said in a news release.
According to an IRS investigation, from 2001 and up to at least March 2008, Crithfield, Donaldson and others used companies to promote, market and implement a strategy known as a “Business Protection Plan” for affluent clients, officials said.
The plan enabled clients to claim business expense deductions based on sham "insurance premium" payments made to offshore entities in amounts intended to substantially reduce the clients' taxable income, officials said.
The “so-called” premiums were not based on actual business risks, but rather on the client's interest in reducing business income for tax purposes, the indictment said.
After obtaining the benefit of a tax deduction on the client's corporate income tax return, the client would later receive approximately 83 percent to 85 percent of the premium back, the indictment said.
According to the indictment, Donaldson and Crithfield caused clients to file false and fraudulent personal and corporate income tax returns which claimed deductions for premiums paid through the Business Protection Plan.
Donaldson and Crithfield, who also have residences in the Bahamas, each face five years in federal prison and a $250,000 fine if convicted.