The federal grand jury this week indicted three men on charges related to an elaborate and long-running scheme to conceal income and other assets from the IRS and creditors.
According to the indictment, the men might have made more than $60 million in the scheme.
Wendell L. Waite, a certified public accountant living in Las Vegas, and Richard C. Neiswonger, also of Las Vegas, along with attorney William S. Reed, of Colorado, face conspiracy charges. Reed is the author of the book “Bulletproof Asset Protection.”
From 1998 to 2006, the men sold services and products designed to help people hide money and assets in a variety of ways, according to the indictment.
The men are alleged to have sold four inter-related products: corporations with disguised ownership; disguised ownership bank accounts; property liens that created the false impression that a client had little or no equity in a property; and a so-called business opportunities program, “which taught them how to sell the fraudulent products” for Asset Protection Group, a dummy corporation around which many other bogus firms were created.
The indictment alleges Asset Protection sold the training program to as many as 1,000 people at $10,000 each; created about 2,500 disguised ownership corporations in Nevada for about $800 each; opened more than 900 disguised ownership bank accounts, and prepared more than 400 fraudulent liens.
The final three years of the scam, from 2003 to 2006, Asset Protection is alleged to have received more than $63 million in deposits and made more than $62 million in withdrawals through one of its bank accounts. The company also reportedly sent more than $11 million to offshore accounts.
The Federal Trade Commission intervened in the company’s operations in July 2006. In 2007, the federal court in Missouri prohibited the company from marketing its training program.
The IRS is the lead investigating agency.
Neiswonger and Reed also were charged with multiple counts of mail and wire fraud. Reed faces additional charges of aggravated identity theft and attempted tax evasion.
Arrest warrants were issued for the two men, who were not in custody as of Friday afternoon.
Waite was summoned to court and a hearing is set for Wednesday.
Reed faces a maximum of 364 years in prison and a $7.75 million fine, Neiswonger, a maximum of 290 years and $4.25 million fine, and Waite five years and a $250,000 fine.
Contact reporter Doug McMurdo at dmcmurdo@review journal.com