North Carolina Asset Protection News

Justice Department Files Suit To Halt Florida Man’s Promotion Of So-Called Asset Protection Schemes

WASHINGTON, D.C. - Today the Department of Justice filed suit in federal court in Tampa, Florida, to stop David Marvin Swanson of Sarasota, Florida, from allegedly promoting an illegal tax scam that involves the use of sham trusts and limited liability companies. The government simultaneously filed a motion asking the court to enjoin Swanson immediately from these activities. In addition, the government also seeks a complete list of Swanson’s customers.

According to the papers filed with the court, Swanson, who also does business as Dynamic Monetary Strategies, allegedly promotes his system of sham trusts - called “unincorporated business trust organizations” or “UBTOs” - and limited liability companies on his website and in a manual he sells to customers. The manual and website refer to Swanson’s schemes as a form of “asset protection,” which the lawsuit claims is a mere ruse for the illegal tax avoidance which is the real focus of his activities. While he now works alone, the lawsuit alleges that he was formerly an associate of Florida-based Carel “Chad” Prater, who in 2002 was ordered by the Tampa federal court to stop his schemes. The lawsuit explains that Swanson’s system-which he has sold to hundreds of taxpayers-is intended to help his customers illegally drop out of the tax system, making it difficult to detect their tax evasion.

"The Justice Department is moving vigorously to shut down fraudulent tax promotions, including those based on sham trusts,” said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division. “People who act on the promises of tax scam promoters risk significant civil penalties and the possibility of criminal prosecution."

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	Did You Know?
	A Living Trust is an entity created for the purpose of holding and managing assets A Living Trust is an entity created for the purpose of holding and managing assets for the benefit of the creators of the Trust (the “Trustors”) during their lifetimes and then for the purpose of management and distribution of the assets to the beneficiaries designated by the Trustors. There are various reasons for creating Living Trusts: (a) To avoid probate administration on death of either Trustor. (b) To avoid a court supervised conservatorship in the event of lifetime disability of either Trustor. (c) To provide for the management and distribution of assets during continued administration of the Trust or upon its termination.