Extradited pair takes plea in U.S. tax fraud prosecution

A California couple who were involved in an anti-tax scheme have reached a plea agreement with federal prosecutors.

They are Lin M. Bartee and his wife, Christine J. Wenger-Bartee, who had the daring to dash off a letter to the Internal Revenue Service area director in Ogden, Utah, explaining why they did not have to pay taxes. They were involved with IRS Code Busters, a multi-level marketing scheme that purported to teach U.S. citizens why they need not pay income taxes.

They were well known among Costa Rican expats

They made their initial appearances in U.S. District Court in January, 2010, when they entered innocent pleas. A federal grand jury returned an indictment June 26, 2008, charging the former Grass Valley, California, couple with conspiring to evade the payment of federal income taxes, making false statements in a bankruptcy case and fraudulently concealing property in connection with a bankruptcy case, according to the U.S. Justice Department. In addition, Bartee was charged individually with evading the payment of federal income taxes.

The couple were arrested here in May 2009 and unsuccessfully fought extradition to the United States.

According to the U.S. Attorney’s Office in the Eastern District of California, the pair received two years each in federal prison for bankruptcy fraud and tax evasion. They were ordered to pay more than $200,000 in restitution.

According to the indictment, the pair failed to file a federal tax return for the year 2001. In 2002, despite receiving substantial sums in income and from the sale of assets, the pair again failed to file an income tax return for that year. At the same time, they transferred almost $240,000 to the woman’s parents, who then transferred over half that amount to a bank in Costa Rica, said the indictment. In April of 2003, the defendants filed a voluntary bankruptcy petition in the U. S. Bankruptcy Court in Sacramento, California. The defendants failed to list the Internal Revenue Service as a creditor, and they also failed to identify all of the income they received in 2002, the indictment alleged. On Nov. 9, 2004, the bankruptcy court denied their petition. Shortly thereafter, the defendants left the United States for Costa Rica, the government said.

IRS Code Busters provided information to people who do not want to pay income taxes. Much of the information is based on discredited legal theories. For example, some anti-tax literature distributed in the multilevel scheme said that the IRS puts a code in each citizen’s file that required them to pay taxes. Bartee appears to have wanted the IRS to remove the mythical code from his file and wrote the letter to request that, said the Justice Department at the time of his indictment.

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