Tax Shelter Promoter Pleads Guilty to Conspiring to Defraud the IRS

A Texas man pleaded guilty yesterday to conspiring to defraud the IRS by promoting and selling a fraudulent tax shelter. According to court documents, from at least February 2018 until September 2023, Larry C. Conner, 69, of Frisco, conspired with others to defraud the IRS by promoting to taxpayers nationwide an abusive trust tax shelter in which taxpayers diverted nearly all of their income through a series of three purported “non-grantor” trusts and a so-called “private family foundation” for purposes of evading the assessment of taxes owed on that income. Conner promoted the abusive trust tax shelter at in-person seminars to clients in the name of The Business Solutions Group (TBSG). Conner sold the trusts and foundations used in the abusive trust tax shelter for a fee typically ranging from $25,000 to $50,000. Conner admitted that he knew the tax shelters he promoted were fraudulent based on repeated warnings he received from attorneys and accountants that the tax shelter was fraudulent and illegal and his knowledge and receipt of materials that the IRS publishes to educate the public about the illegal nature of abusive trust tax shelters. Conner further admitted to personally using the abusive trust tax shelter from 2016 through 2021, to evade income taxes on about $5.2 million of his income. Conner admitted to promoting the abusive trust tax shelter in concert with the following individuals, among others: a Colorado couple, Timothy McPhee and Marcia Predmore; a Nevada Certified Public Accountant, Weldon Wulstein; a Wyoming-based bookkeeper, Suzanne Thompson; a Mesquite, Nevada man, Roderick Prescott; and an Arizona-based tax preparer, Kent Ellsworth. Conner and his co-conspirators’ caused the filing of false tax returns fraudulently sheltering approximately $156 million in income, which resulted in an approximate tax loss to the IRS of $43 million. McPhee previously pleaded guilty to conspiracy to defraud the United States, tax evasion, and, in a separate case, wire fraud. He is currently serving a 151-month prison sentence. In a separate five-week trial taking place throughout May-June 2026, a jury found Predmore, Wulstein, Thompson, and Prescott guilty of conspiracy to defraud the United States and other tax-related felonies. All four are scheduled to be sentenced in January 2027. Kent Ellsworth pleaded guilty to two counts of aiding and assisting in the preparation of a materially false and fraudulent tax return and is pending sentencing in the District of Arizona on Dec. 7. Conner pleaded guilty to conspiracy to defraud the United States. He is scheduled to be sentenced on Jan. 26, 2027, and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division made the announcement. IRS Criminal Investigation investigated the case. Lauren K. Pope and Amanda R. Scott, both formerly of the Criminal Division’s Tax Section, prosecuted the case. On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (Fraud Division). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.