Justice Department Sues Pasadena Man To Stop Tax Schemes

The United States Justice Department has asked a federal court to permanently bar a local business man from promoting alleged sham pension-plan and welfare-benefit-plan tax fraud schemes, they announced Thursday.

The civil injunction suit against William Alexander, and his two companies – Retirement Plan Services Inc. and Lyons Pensions Inc. – was filed in U.S. District Court in Los Angeles. Officials said the scheme allegedly cost the U.S. Treasury at least $30 million.

According to the complaint, Alexander helps small business owners adopt sham pension plans. He allegedly falsely advises customers that they can claim significant deductions for purported contributions to these sham pension plans in order to reduce or eliminate their federal income taxes. The complaint also alleges that Alexander fraudulently re-characterizes his customers’ non-deductible personal expenses as purported deductible pension-plan contributions.

According to the complaint, Alexander helps customers adopt pension plans that illegally exclude rank-and-file employees. The complaint cites a letter Alexander allegedly sent to one of his clients, a California physician, in which Alexander explains that the goal is to “exclude the employees from this rich pension plan that I use for the owner.” The complaint further alleges that Alexander tries to conceal his pension-plan scheme by purposely not filing required documents with the Internal Revenue Service and Department of Labor.

Alexander’s promotion of the pension plan and welfare-benefit tax fraud schemes have allegedly cost the government at least $30 million.

In the past 10 years the Justice Department’s Tax Division has obtained hundreds of injunctions against tax scheme promoters and tax preparers. Information about these cases is available on the Justice Department website.