A Complex Desultory Philippic An Introduction to Tax Issues & Offshore
Bill E. Branscum
"Anyone can convict the guilty, but
it takes real talent to convict an innocent man."
I don't know who that quote was first attributed to,
but I suppose we would all sleep a little better if we could believe
it to be true. My problem is, I know better, and I suspect that
most of you who are similarly employed know better too. Convicting
the innocent can be all too easy.
In the world of offshore offerings, and the professional
pitch men who promote them, leading our Clients to see the light,
and recognize that they have been defrauded is a difficult, thankless
job. If we get the job done, and do it effectively, our Clients
feel terribly violated and betrayed. Once they see that they have
been conned by those they trusted, they are generally ashamed, and
they typically feel guilty that their judgment put their family
in a precarious, vulnerable position.
After that ego-shattering experience, we have to explain
to them that they cannot expect the government to treat them as
a victim; their government simply will not see it that way.
There has been something of a paradigm shift with
regard to the treatment of tax scam victims. Whereas the government
was previously satisfied to destroy them financially with overwhelming
financial penalties, the government more and more frequently adopts
the position that they are criminals, whose participation in these
tax schemes was motivated by sheer greed, notwithstanding the fact
that many of them simply do not fit that profile.
Earlier this year, the government convicted a retired
military officer, with a completely clean record, for tax evasion,
essentially arguing that he was a nasty, greedy, tax cheat, in the
face of proof that every dime of his taxable income was declared,
and all he did was demand (repeatedly and in writing) that someone
answer his questions, before he would pay the taxes that the government
claimed to be due. A series of "experts" had told him
that there was nothing in the tax code that specifically imposes
an obligation on individual Americans to pay the tax; all he wanted
to know was, "Can you show me where it says I am
obligated to pay income tax?"
Frankly, I would like to see the IRS answer that question
. . . not because I want to know the Answer,
but because I am sick and tired of seeing these slimeball promoters
argue that there is no answer to that question, and it sickens me
to see my professional brethren look stupid when asked such a simple
question on the witness stand.
I find that to be an awkward, professional embarassment.
Considering that he and his wife were active in their
Church, and actually (and consistently) tithed to their Church throughout
the relevant time period, it would be easy to find it incomprehensible
that the government could attribute his behavior to greed, and convict
the man without giving the case a second look - especially since
he paid his taxes in full prior to indictment.
The fact is, there are two sides to this story; while
I personally felt this case was a tragedy, there was nothing even
vaguely incomprehensible about it.
It was the classic, everyday, run-of-the-mill situation.
The Defendant allowed himself to trust a used-car-salesman-cum-financial-advisor
named Wayne C. Rebuck, who led him down the Commonwealth Trust Company
[CTC] "primrose path." The CTC espoused a complicated,
convoluted, collection of tax protester theories, and patriot movement
rhetoric, while promoting the sale of amateur hour offshore trust
constellations, and foreign bank accounts, characterizing their
promotions as being completely legal, and indeed, the "patriotic"
thing to do.
The Defendant bought into this garbage "hook,
line and sinker."
Like most people, the Defendant believed that there
are "secrets" shared by the smart and wealthy that allow
them to protect their assets and income from taxes. It would be
interesting to stand outside Wal-Mart and take a poll; I believe
that most people share that belief. It is an urban legend that the
scam promoters prey upon with remarkable alacrity, bouncing from
one bizarre theory to the next without missing a beat.
Believing in the legal advice and tax related information
that he paid for, and perceiving himself to be a patriot on a mission,
the Defendant took the fight directly to the IRS, just as he and
thousands like him have been encouraged to do. A prolific writer,
he penned various, numerous, and invariably voluminous letters to
everyone at the Internal Revenue Service that he could correspond
with, demanding with unmasked righteous indignation that they obey
the law . . . the law according to the way he had been indoctrinated
to perceive it.
Succinctly put, he believed that the collection of
income tax was illegal, and he applied himself to proving it with
single-minded determination, becoming a completely insufferable
pain-in-the-ass to the IRS employees tasked with dealing with him.
Like so many misguided martyrs before him, his crusade was doomed
from its inception, but like all crusaders, he "knew"
he was in the right, and fervently believed that he deserved to
The Defendant was an obstinate individual, gifted
with a remarkable combination of intelligence and naivety. I read
every page of his correspondence, as well as every word of the government's
efforts to respond. They never specifically addressed
(let alone answered) his question.
Unfortunately, neither the government, the Courts,
nor the juries that judge them, have much patience with the misguided
victims of these scam promoters. I personally believe that the best
witness most of these people could have would be a forensic psychiatrist
experienced with cults, and cult indoctrination. I don't have those
credentials, but I deal with these people a lot, sometimes I believe
I understand this, and I may be able to explain it.
For people who are waging a war on misguided principles,
it really has nothing to do with greed.
These people have a genuine, albeit misguided, belief
in such things as tax schemes, redemption scams and the various
offshore offerings. I have already written a number of articles
about the schemes themselves, including a particularly in depth
review of scams related to Taxes,
and another related to Trusts.
I trust that I have made my position clear.
Frankly, although I do have some issues and concerns
with the way the system works, I think the Internal Revenue Service
and the Department of Justice are doing a wonderful job shutting
these promoters down. Were it not for them and their efforts, tax
scam promoters like: Lynne Meredith (We the People); Eddie Ray Kahn
(American Rights Litigators); John Michael Crim, John Brownlee &
Wayne C. Rebuck (Commonwealth Trust Company); Atty. Ed Bartolli
and Michael Vallone (Aegis Trust Company, Heritage America Trust
Company, Athens Trust Company); Michael Maricle (Athens Trust Company);
Keith Anderson, Wayne Anderson, Richard Marks, Karolyn Grosnickle,
James Moran and Pamela Moran (Anderson's Ark & Associates);
and several hundred others I could name, would still be promoting
tax scams, rather than stamping license plates where they belong.
What concerns me is the fate of those innocent dupes
who genuinely, and honestly, believed in the garbage these promoters
were selling, and relied upon what they were taught in good faith.
I would like to see the government recognize the power of cult indoctrination,
and go back to treating the victims more like victims, but I say
that fully aware that I don't have the influence to effectuate that
kind of paradigm re-shift, and I doubt that anyone does.
I suspect that it has become a "numbers"
issue. Whether it's a "War on Terror," a "War on
Drugs," or a "War on Tax Scams," Congressional funding
depends upon a body count. There are a lot more victims of these
scams out there than there are promoters, and when you're in the
business of putting heads on plates, pretty much anyone's head will
do, especially if the tax scam victim is a prominent person, or
a person of significant wealth.
Consequently, when the promoters go down these days,
they take their victims with them, thereby victimizing them again,
with the support and encouragement of the Internal Revenue Service.
Prosecuting these tax cases is like "shooting fish in a barrel,"
especially when the government parades proselytic prostitutes like
Wayne C. Rebuck and Michael Maricle in front of the juries to take
the stand and proclaim that their victims were knowing and willing
participants in their scams, explicitly expressing the intent to
commit tax evasion all along.
I have sat next to more than one dumb-struck scam
victim at trial, who simply could not believe what they were hearing
from the mouth of a person that they had trusted, believed in, and
relied upon. To see Wayne Rebuck do his Jimmy Swaggart routine,
piously denouncing his personal transgressions, while self-servedly
dragging everyone else he could into the mire with him, was enough
to make anyone sick.
Imagine HiroHito standing before God, condemning a
Kamikaze pilot for fighting dirty in exhange for a "deal."
It can be a rude awakening for the naive, but it shouldn't
be any surprise to the rest of us. I mean really, let's be serious
for a moment.
I know and understand that "cooperating defendants"
are not generally choir boys, but these people are scam promoters,
con artists . . . liars by profession to whom words are the instruments
of deception, and a way to get what you want. Does anyone really
believe that a person who chooses to make their living lying through
their teeth to hapless Clients, pumping them up to believe they
are the latter day patriots at today's Boston Tea Party, setting
them up with expensive bogus trust programs that amount to economic
suicide, while bleeding them for every dime they can get, will suffer
pangs of conscience at selling those same people down the river
when the United States of America has the Habeas Grabbus on their
It's bad enough that gullible people are sold tax
schemes and bogus trust constellation packages by greedy (or stupid)
wannabe tax gurus out to make a buck. It adds injury to the insult
when the con artists are caught, and their dupes are marched in
front of the government's machine gun by the very same clowns who
got them in trouble to begin with.
They lie, and it should be obvious to anyone paying
Common sense, and everyday human experience, say that
inundating the Internal Revenue Service with letter, after letter,
after letter . . . demanding that they explain how their position
is in compliance with the law, is hardly the manifestation of a
guilty mind. One cannot get all worked up to "fight the good
fight," knowing that they are in the wrong, but the truth is,
it is easier to see these people as greedy tax cheats, than to understand
what is actually going on. Even represented by one of the best law
firms in the Country who specialize in these sorts of cases, Defendants
face an uphill battle.
Considering the fact that many of these people hire
yahoo lawyers who have been drinking the same Kool-Aid, many of
these trials can be a real circus.
If you want my advice, don't ever take on one of these
cases without meeting all the players involved. You don't want to
wind up sitting next to some kooky Kamikaze at the defense table,
represented by a turbaned taliban lawyer punctuating every sentence
with Allah Akbar! Seriously, as long as clowns like Oscar Stilley,
Ed Bartoli, Michael Vallone, Alan Richey, Lindsey Springer, Ed Rivera
(NOT Dr. Edwin Rivera), and Luis Ewing are guiding people in their
"defense" of these cases, the government is going to keep
targeting barrels where the fish shoot themselves.
Worse yet are the "bleed 'em and plead 'em"
shysters who prey upon those who can afford them, billing them to
put together a great defense that they have neither the knowledge,
experience, nor the intention to present. Can you imagine hiring
a cardiac surgeon who never actually completed a successful operation?
I suppose it's a blessing that those characters don't hire people
For those of us who adhere to the notion that people
should not be criminally convicted for actions they do not perceive
to be wrong, this is a tragedy, but these people are convicted,
and sentenced to prison, every day these days. To me, it seems like
the government's failures to address their questions should be enough,
but for acquital to be reasonably possible, the burden falls to
their defense teams to show the Court, and indeed the government,
what they are really dealing with in these cases. Sometimes, as
was the case with Michael Maricle, the promoters who turn on their
former disciples are revealed to be the pernicious mutts that they
I sincerely believe that we have the finest, fairest
system of justice that exists in this world, but it troubles me
to see anyone convicted and imprisoned for actions that they did
not believe to be wrong - whether convicting them takes talent,
or not. Nevertheless, the bottom line is, in the end, most of these
razzle-dazzle offshore offerings boil down to one simple, draconian
"Offshore" = Sophisticated Means = Sentence
Enhancement according to the USSG.
Bill E. Branscum, Investigator