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Former NFL Player, Ex-Casino Owner and Nevada Businessman Indicted in Massive Tax Fraud Scheme

Posted on: Thursday, 29 January 2009, 11:09 CST

WASHINGTON, Jan. 29 /PRNewswire-USNewswire/ -- A Las Vegas federal grand jury has returned an indictment charging Alan Rodrigues, a former pit boss and casino owner from Henderson, Nev.; Weston Coolidge, a businessman from Las Vegas; and Joseph Prokop, a former National Football League punter from Upland, Calif., with a tax fraud scheme for their promotion of a fraudulent tax product through the now defunct National Audit Defense Network (NADN), the Justice Department and Internal Revenue Service (IRS) announced today.

The defendants were charged with one count of conspiracy to defraud the United States, 15 counts of aiding in the preparation of false tax returns, and five counts of mail fraud for their part in the scheme. According to the indictment, Rodrigues was NADN's general manager, Coolidge was NADN's chairman and president and Prokop was the national marketing director of Oryan Management and Financial Services. It is alleged that Oryan Management and Financial Services is a sole proprietorship, operating in Upland, Calif., that paid NADN a commission to sell Tax Break 2000.

According to the indictment, in early 2001, NADN began selling Tax Break 2000, a shopping Web site that the defendants fraudulently stated would allow customers to claim legitimate income tax credits and deductions under the Americans with Disabilities Act of 1990 (ADA) and the Internal Revenue Code. NADN allegedly marketed its services nationwide through radio advertisements and promotional appearances on talk radio programs. The indictment further alleges that, from 2001 through 2004, the defendants caused NADN to sell Tax Break 2000 approximately 21,610 times to customers around the country. Throughout the scheme, Tax Break 2000 was also known as tb2000.com, shopn2000.com and mallforall.com.

According to the indictment, Tax Break 2000 was an attempt to abuse a provision of the ADA that provides a "disabled access credit" to help offset necessary, reasonable expenditures made by eligible small businesses to comply with the ADA's requirement that their facilities be accessible to disabled persons. The indictment alleges that these expenditures include amounts paid to remove architectural barriers, to remove communication barriers, to provide interpreters, to acquire or to modify equipment, or to provide other similar services, modifications, materials or equipment.

The indictment further alleges that the defendants defrauded the United States and their customers in a number of ways. Some of the ways alleged in the indictment included creating Tax Break 2000 as a Web site that was not accessible to the disabled so that they could sell modifications that purported to make it accessible to the disabled; falsely telling customers that purchasing the modifications entitled them to a lawful income tax credit and deduction for having made their Web sites accessible to the disabled; and choosing the sale price for the modifications, $10,475.00, solely to maximize the fraudulent income tax credits and deductions.

Additionally, the indictment alleges the defendants induced customers to sign supposed promissory notes for approximately 80% of the $10,475.00 purchase price of the modifications, when they had no expectation that the customers would make payments on the promissory notes; paying attorneys to write favorable opinion letters about Tax Break 2000 to refute a legal memorandum in which NADN's own tax experts determined that Tax Break 2000 was illegal and could subject those who sold it to criminal penalties; creating false IRS Forms 1099 to create the appearance that customers' Web sites were generating commission income and that the purported promissory notes were being paid off; and preparing false tax returns on their customers' behalf.

On April 13, 2004, the Justice Department's Tax Division filed a complaint seeking to enjoin, among others, NADN, Rodrigues, Coolidge and Prokop from selling fraudulent tax schemes, including Tax Break 2000. NADN ceased operations in May 2004. In June 2004, a federal bankruptcy court in Las Vegas entered a permanent injunction against NADN. Prokop was also enjoined in June 2004, after consenting to entry of a permanent injunction. In April 2005, Rodrigues and Coolidge both consented to permanent injunctions.

An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, the defendants face maximum potential sentences of 150 years in prison and millions of dollars in fines.

The case is being prosecuted by Tax Division trial attorneys Jay R. Nanavati and Timothy J. Stockwell. The case was investigated by the IRS, Criminal Investigation Division.

Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site http://www.ustreas.gov/irs/ci/.

SOURCE U.S. Department of Justice

Source: PR Newswire

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