According to the General Accounting Office, 400,000 Americans have attempted tax evasion in the past two years, two thirds of them using illegal offshore credit-card accounts—a rampant trend. Many people fear the agency is outgunned. But IRS investigators are still securing convictions. Here, from the IRS archives, are ten of the biggest tax scofflaws so far this century.
1. ANDERSON'S ARK & ASSOCIATES. Nine members of this tax scam, based in California and Costa Rica, have been convicted. The entity's founder awaits trial. From 1998 to 2001 Anderson's Ark stashed money from 1,500 taxpayers in offshore trusts, where the clients could access the money through debit cards. Anderson's then prepared fraudulent tax returns, claiming the money was spent for legitimate deductions. Estimated loss to the U.S. government: $28 million.
2. VERNON JAMES, king of the slavery-reparations tax scammers, persuaded 300 African-American taxpayers that they were eligible for a "black investment tax credit," and sought more than $8.4 million in bogus refunds on their behalf. In January of 2002 James was sentenced in Texas to six and a half years in prison.
3. RICHARD G. FLOWERS and five Oregon associates founded the Christian Patriot Association, a "warehouse bank" that served 900 tax evaders, who used aliases and false Social Security numbers to shield themselves from IRS scrutiny. The government lost $5 million. Flowers received five years in prison in January of 2003.