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Riago Trust. Respondent agrees that the Riago Trust was a
grantor trust.
T. Indictments; Criminal Convictions
On April 9, 1987, a Federal grand jury indicted petitioners
on 139 counts of criminal tax violations. Two of the counts
applied only to Monica. The 137 counts against Robert only, or
Robert and Monica, are as follows: (1) One count of conspiracy to
defraud the United States and investors in connection with
certain tax shelter sales in violation of 18 U.S.C. sec. 371
(1994); (2) 133 counts of aiding and assisting in the preparation
of false tax returns in violation of 26 U.S.C. sec. 7206(2); (3)
one count of willfully filing an income tax return which was
false as to a material fact (petitioners' 1980 tax return) in
violation of 26 U.S.C. sec. 7206(1); and (4) two counts of
willfully failing to file income tax returns for 1981 and 1982 in
violation of 26 U.S.C. sec. 7203.
In late 1987, Robert was found guilty on all 137 counts that
he was charged with. On May 13, 1988, Robert was sentenced to 13
years imprisonment and fined $940,000 as a result of his
convictions. Robert appealed the convictions relating to the tax
shelters, but not the convictions for false tax return (for 1980)
and for willfully failing to file tax returns (for 1981 and
1982). Robert's convictions were affirmed. United States v.
Iles, 906 F.2d. 1122 (6th Cir. 1990).
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