FOR IMMEDIATE RELEASE TAX

THURSDAY, JUNE 8, 2006 (202) 514-2007

WWW.USDOJ.GOV TDD (202) 514-1888

Nevada Man Sentenced to Prison for

Role in
Tax and Investment Fraud Scheme
WASHINGTON—R. Scot Stokes, of Henderson, Nevada, was sentenced to 54
months in prison for conspiring to defraud the United States and conspiring to
commit mail and wire fraud, in connection with the promotion of a tax and
investment fraud scheme, the Department of Justice and the Internal Revenue
Service (IRS) announced today. U.S. District Judge Ted Stewart also ordered Stokes
to serve 3 years of supervised release upon the completion of his term of
imprisonment. In February 2005, Stokes pleaded guilty to the conspiracy and
admitted that he and his co-conspirators’ actions caused the filing of more than
2,000 false and fraudulent federal income and trust tax returns and a loss of federal
tax revenue of between $7 million and $10 million. In addition, Stokes admitted
participating in fraudulent investment schemes that caused customers to lose
between $2.5 million and $5 million. Stokes is one of eleven individuals who have
pleaded guilty in this case, including four attorneys and one certified public
accountant.

“People who promote tax fraud are cheating all law-abiding taxpayers,” said Eileen
J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division.
“The Department of Justice is determined to root out tax fraud schemes and
prosecute those who promote and use them.” “The government will not tolerate tax
schemes that promote the use of abusive trust arrangements to evade taxes,” said
Nancy Jardini, IRS Chief, Criminal Investigation. “Public confidence in our system
of taxation is vital; therefore, we will continue our enforcement efforts to halt
fraudulent tax schemes and hold the promoters of these schemes accountable for
their actions.” According to papers filed with the court, Stokes admitted that from
1994 to 2004, he and his conspirators—using the names Advanta Strategies, World
Contractual Services, and CornerStone West—marketed and sold a fraudulent trust
scheme to over 300 clients through domestic and offshore seminars, promotional
materials, and opinion letters. Stokes and his co-conspirators falsely represented to
clients that by placing their businesses and assets into the names of trusts, the clients
could lawfully eliminate or substantially reduce their income tax liabilities.
Stokes also admitted to placing clients’ assets in unsound “investments” in
international financial markets and other offshore “investing opportunities” that he
knew would put the clients’ funds at considerable risk and would never pay any
return.

Assistant Attorney General O’Connor and Acting U.S. Attorney Stephen J.

Sorenson thanked Tax Division trial attorneys Nicholas D. Dickinson and Lea A.
Carlisle who prosecuted the case. They also thanked the special agents of the IRS
and Federal Bureau of Investigation whose assistance was essential to the successful
investigation and prosecution of the case.

More information about the Justice Department’s efforts against tax-scam promoters
can be found at http://www.usdoj.gov/tax/taxpress2006.htm. Information about the
Justice Department’s Tax Division can be found at http://www.usdoj.gov/index.html

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