A Mississippi grand jury has charged a man from Florida for his part in stealing clients’ funds and profiting from an illegal tax shelter.
According to court documents and the Justice Department, Stephen T. Mellinger III was a trusted financial advisor with many clients throughout the United States. He is now the subject of an unsealed indictment accusing the tax specialist of creating an illegal tax shelter, siphoning off clients’ funds, and money laundering.
Florida man charged for illegal tax haven
The RS Criminal Investigation and Defense Criminal Investigative Service are investigating the case. Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Todd W. Gee for the Southern District of Mississippi, the team that announced Mellinger III’s charge.
The case against the individual harks back to 2013 when it is alleged that Mellinger III formed the tax shelter with accomplices. The fraud was presented to his clients as a deduction on their tax returns if they sent money to a company that the accused owned.
According to the unsealed indictment, these conspirators then allegedly “returned the money to a bank account that clients controlled less a percentage fee that they charged for their services. Even though tax shelter clients received their money back, Mellinger allegedly directed them to claim the transfer to the company as a deduction on their tax returns and label the deduction as a “royalty” payment. Mellinger allegedly earned more than $3 million in fees from the shelter.”
This grand jury decision’s result is in addition to the 2016 federal government claim that funds from some of Mellinger’s clients were attempted to seize. These individuals were embodied in scams to defraud TRICARE, with false claims to the U.S. Department of Defense’s health care benefit program.
The Justice Department further alleges that Mellinger stole money from these parties that were under investigation and had some assets seized, seeing their predicament as an opportunity to snap up the funds while they were under government review.
After initially laundering the funds, he used this stolen money to buy a home in Delray Beach, Florida.
He has now been charged with conspiracy to defraud the United States, aiding in the preparation of false tax returns, conspiracy to commit wire fraud, conspiracy to commit money laundering, and money laundering.
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