Quellos Principals Sentenced

Yesterday, the United States Attorney's Office for WD WA announced here the sentencing off Jeffrey Greenstein, for CEO of Quellos Group, LLC, and Charles Wilk, head of Quellos' private client group (he was also a tax attorney). They each received 50 months in prison. (I have previously blogged on Quellos here).

Greenstein and Wilk were convicted of crimes involving transactions that never occurred and structures that were never implemented. From the press release:

Greenstein and Wilk did not tell clients, or the attorneys who evaluated the proposals, that the POINT transaction was predicated on a sham. They knew but did not disclose that there was no offshore investment fund, and that no shares of stock were actually purchased and possessed by any offshore investment fund. They knew that the purported offshore investment fund was merely a shell entity with nominee administrators and no assets or employees.

One of the themes of the press release was to remind all that tax crimes -- particularly the larger tax crimes -- steals from all of us.

Thus, this quote from the sentencing judge, Judge Ricardo S. Martinez: "You conspired with others to steal from every other taxpayer who voluntarily pays their taxes. You stole from the very society that allowed you the opportunity to achieve wealth and status beyond most peoples' wildest dreams."

And this quote:

"This scheme was pure fraud aimed at cheating critical government programs of $240 million in taxes. These dollars aren't just numbers -- this fraud affects real people with real needs," said U.S. Attorney Jenny A. Durkan. "That amount of tax money would pay for many small business loans to create jobs, it would pay for enrollment of 31,579 disadvantaged children in Headstart, or it would pay for a month of hot breakfasts for more than a million hungry schoolchildren. It is fortunate that through the hard work of IRS investigators, these tax dollars have been repaid."

Shame on them!