United States v. Turner, No. 12-1420 (3d Cir. 2013)Annotate this Case
Turner, the author of Tax Free!, instructed readers to escape income taxation by using common law trust organizations (colatos), and established FAR to assist in implementing colatos. In 1991, Turner enlisted Leveto, the owner of a veterinary clinic, as a FAR member. FAR created Center, a foreign colato, and appointed Leveto as the general manager and Turner as a consultant. Leveto “sold” his clinic to Center, which “hired” Leveto as its manager. Leveto continued to control the clinic, but stopped reporting its income. Center did not pay taxes because it distributed the income to other foreign colatos, which, Turner claimed, “transformed” it to untaxable foreign source income. Leveto began to market Tax Free! In 1995, the IRS began a criminal investigation. In 2001, Turner and Leveto were charged with conspiracy to defraud the IRS by concealing Leveto’s assets, 18 U.S.C. 371. Turner moved to exclude recorded conversations between Leveto and an undercover agent and foreign bank records seized from Leveto’s office and residence. The district court admitted the conversations, reasoning that they furthered an unindicted conspiracy to impede tax collection efforts, and held that the government properly authenticated the foreign bank documents. Turner was convicted, sentenced to 60 months’ imprisonment, and ordered to pay $408,043 in restitution, without any findings about his ability to pay. The Third Circuit affirmed.