DENVER - A former Denver attorney has pled guilty in federal court to tax evasion-related charges.
Eva Melissa Sugar, 61, of Aurora, entered the guilty plea Tuesday before U.S. District Court Judge John L. Kane to a charge of conspiracy to defraud the United States.
Sugar and two co-defendants -- Jerry L. Roberts and Gregory N. Laurence -- were indicted by a federal grand jury in Denver last May. Roberts pled guilty to failure to file tax returns last month and is scheduled to be sentenced by Judge Kane on Nov. 18. Laurence pled guilty to attempting to obstruct the administration of internal revenue laws last February and is scheduled to be sentenced by Judge Kane on Sept. 4.
Sugar is set to be sentenced on Oct. 29.
According to information contained in the indictment and plea agreements, Sugar was a practicing attorney in Denver specializing in tax matters. Around 1999, Sugar began receiving referrals from a group called Financial Fortress Associates.
FFA promoted the use of so-called Constitutional Pure Trust Organizations as a part of various schemes to avoid tax reporting requirements, including transferring ownership of most or all assets belonging to a taxpayer or a taxpayer’s business to trusts and treating payments to the same trusts as business deductions. FFA further advised clients not to file tax returns or any other documents with the IRS on behalf of the trusts. FFA recruited clients through the internet and in seminars conducted in hotel conferences rooms around the country, including locations in Colorado, Georgia, and Texas. At some of these meetings, Sugar explained how the FFA’s banking program worked, and others associated with FFA explained other aspects of FFA’s program.
Sugar charged her clients fees for her services, including an initial fee to set up bank accounts and associated unincorporated business organizations, as well as annual maintenance fees. For additional fees, Sugar allowed her clients to control funds in the UBO bank accounts through the use of blank checks that she would sign, for a fee, as the account signer or trustee. The clients would then fill in the checks, spending the money from the accounts in whatever manner they desired. Sugar provided these services for more than 150 clients, and in so doing, performed various overt acts in furtherance of the conspiracy, prosecutors said. The tax loss resulting from Sugar’s activities as part of the conspiracy is between $2.5 million and $7 million.
A client of Sugar’s, Jerold Sorensen, was charged in a separate indictment with attempted obstruction of the administration of the internal revenue laws and was found guilty by a jury in Denver last June. Sorensen is scheduled to be sentenced by U.S. District Court Judge Raymond P. Moore next month.
The charge to which Sugar pled guilty, conspiracy to defraud the United States, carries a penalty of not more than 5 years in federal prison and a fine of up to $250,000. Failing to file income tax returns, the charges to which Roberts pled guilty, carry a penalty of not more than 1 year in federal prison and a fine of up to $100,000 per count. Attempted obstruction of the administration of the internal revenue laws, the charge to which Laurence pled guilty and of which Sorensen was convicted at trial, carries a penalty of not more than 3 years in federal prison and a fine of up to $250,000 per count.