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Pinellas man gets five years in federal prison in tax fraud scheme

TAMPA — A federal judge sentenced a 60-year-old Pinellas County man to five years in prison on Tuesday for concocting a scheme to defraud the federal government out of $2.8 million.

Jack Lee Malone, 60, was found guilty in March of conspiring to impair and impede the Internal Revenue Service by promoting an unlawful tax avoidance scheme.

He and co-defendant Joseph Sweet convinced 1,300 national clients that they didn't have to pay any federal income taxes, according to the U.S. Attorney's Office in Tampa.

Starting in 1999, federal prosecutors said the pair convinced their clients that they could avoid paying federal taxes by putting their income and assets in "sham" trusts sold by their businesses, JoY Foundation and EDM Enterprises.

They told people that income is "not taxable," that filing federal tax returns is "voluntary" and advised them to "deceive the IRS."

An ex-client of the JoY Foundation, 64-year-old Terry Moore of Riverview, pleaded guilty in February to a charge of conspiring to impede the IRS. He was sentenced Tuesday to eight months of home detention and five years of probation.

Moore cooperated with the government and testified against Malone and Sweet, who was also found guilty and will be sentenced in August.

Pinellas man gets five years in federal prison in tax fraud scheme 06/15/10 [Last modified: Tuesday, June 15, 2010 10:40pm]
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