A financial planner in Cleveland has pleaded guilty to charges of conspiring to defraud the United States and filing a fraudulent tax return. The advisor in question, Rao Garuda, was implicated in an illegal scheme known as the Advanced Legacy Plan or the Ultimate Tax Plan.
Garuda was president and chief executive at Associated Concepts Agency Inc., and the scheme was designed to help affluent individuals unlawfully minimize their tax liabilities, according to a statement from the Justice Department. The operation entailed the transfer of assets to a limited liability company, thereby vesting ownership in a charitable organization overseen by Garuda's co-conspirators. They exploited these charity contributions to falsely claim tax deductions.
Despite receiving legal advice warning against the scheme's illegality, Garuda actively promoted and facilitated it for his clients. Furthermore, he aided clients in retroactively altering documents to claim tax deductions after the conclusion of the tax year.
Garuda specialized in medical professionals, and claimed he could help reduce taxes, eliminate debt and increase his clients’ spendable income.
"As an American taxpayer, do you feel inundated with taxes? Or overwhelmed with debt?" his LinkedIn page asks. "Do you prefer to pay income taxes ONE time (not 2, 3, 4 times on the same money)? Are you frustrated with the mixed advice coming from financial institutions, advisors, and those who supposedly have your best interest in mind?"
"If you nodded YES to the above, we can help. We help business owners, professionals (both W-2 and 1099) and working families learn how they can legally recover 10s of 1000s of dollars a year they have no idea they are losing — slipping right into the hands of the Federal Government, Wall St., and financial institutions," the posting continues. "We hate taxes, and so should you. Now, it’s time to stop hating and do something about it."
The former chief financial officer of Associated Concept Agency, Cullen Fisher, pleaded guilty last year to conspiring to defraud the IRS.
As a result of his actions, Garuda caused a substantial tax loss amounting to over $2.7 million. In recognition of his guilt, he has agreed to make restitution.
Awaiting his sentencing, Garuda faces a maximum of five years in prison, supervised release, restitution, and monetary penalties. The IRS criminal investigation department is presently conducting an investigation into this case.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
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