Date: 08-06-2014

Case Style: United States of America v. Eva Melissa Sugar

Case Number: 1:13-cr-00193-JLK

Judge: John L. Kane

Court: United States District Court for the District of Colorado (Denver County)

Plaintiff's Attorney: Matthew T. Kirsch, Anna Edgar, Pegeen Rhyne, and J. Chris Larson

Defendant's Attorney: Matthew Kyle Belcher - FPD for Eva Melissa Sugar

William Hickman Ewing, Jr. for Gregory Nathan Laurence

Charles Robert Holloman, Jr. for Jerry Lynn Roberts

Description: DENVER, CO – Eva Melissa Sugar, age 61, of Aurora, Colorado, pled guilty yesterday before U.S. District Court Judge John L. Kane to Conspiracy to Defraud the United States in connection with the collection of taxes, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Judge Kane is scheduled to sentence Sugar on October 29, 2014. Sugar and two co-defendants, Jerry L. Roberts and Gregory N. Laurence, were indicted by a federal grand jury in Denver on May 8, 2013. Roberts pled guilty to failure to file tax returns on July 15, 2014 and is scheduled to be sentenced by Judge Kane on November 18, 2014. Laurence pled guilty to attempting to obstruct the administration of internal revenue laws on February 6, 2014 and is scheduled to be sentenced by Judge Kane on September 4, 2014.

According to information contained in the indictment and plea agreements, Sugar was a practicing attorney in Denver, Colorado and obtained an L.L.M. in Taxation from the University of Denver. Around 1999, Sugar began receiving referrals from a group called Financial Fortress Associates (FFA). FFA promoted the use of so-called Constitutional Pure Trust Organizations (PTOs) 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 or “meetings” conducted in hotel conferences rooms around the country, including locations in Colorado, Georgia, Texas, and elsewhere. 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 (UBOs), as well as annual maintenance fees. For additional fees, Ms. 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. The tax loss resulting from Sugar’s activities as part of the conspiracy is between $2.5 million and $7 million.

Roberts and Laurence were clients of Sugar. Roberts was a resident of Polk County, Florida and worked for Roberts Enterprises, a family business which assisted charitable organizations, primarily religious ones, with fundraising. Beginning in 2001 through at least May of 2007, Roberts used the services of Sugar, to take steps to prevent the IRS from learning his true income and assessing taxes on that income. Roberts then failed to file tax returns reporting his income.

Laurence was a resident of Germantown, Tennessee and practiced medicine through two entities in which he was the sole physician, Germantown Family Care and Obstetrics, LP and Germantown Aesthetics, LP. Beginning in 2002 through the end of 2007, Dr. Laurence used the services of Melissa Sugar to disguise his true income from the IRS and to support the false business and personal tax returns he filed during the relevant period.

Another 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 in June of 2014. Sorensen is scheduled to be sentenced by U.S. District Court Judge Raymond P. Moore on September 8, 2014.

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 charged 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.

This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service and prosecuted by Assistant U.S. Attorneys Matthew T. Kirsch, Anna Edgar, Pegeen Rhyne, and J. Chris Larson.

Outcome: See above

Plaintiff's Experts:

Defendant's Experts:

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