Reserve-Bank.com - Banking Forum

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A federal grand jury indictment issued Wednesday June 26, 2008 alleges that attorney David Eugene Ross II and Patrick Merrill Brody conspired to impede tax laws through the operation of financial services firm Merrill Scott & Associates in Salt Lake City.
According to the indictment, the firm tried to attract wealthy customers by claiming to legally cut income taxes under "master financial plans." However, those plans allegedly generated only the illusion of mortgage, charity and other deductible expenses by cycling customer funds through a maze of bank and brokerage accounts.
The scheme was conducted from about July 1998 to April 2002, the indictment claims. It says the two men used customer funds to pay the company's overhead and payroll and to buy and furnish a Park City home.
Both men are charged with conspiracy to commit tax fraud, conspiracy to evade Brody's income taxes for 1999 to 2001, and money laundering. In addition, Brody, who was the managing director of Merrill Scott, is charged with failing to file an individual income tax return for 2001.