WASHINGTON — A Texas tax-shelter promoter pleaded guilty to conspiring to defraud the Internal Revenue Service through a nationwide scheme that prosecutors say concealed roughly $156 million in income and caused about $43 million in federal tax losses.
Larry C. Conner, 69, of Frisco, Texas, admitted promoting and selling an abusive trust arrangement to taxpayers from at least February 2018 through September 2023, according to the Justice Department.
Conner marketed the strategy through in-person seminars under the name The Business Solutions Group, or TBSG, charging clients typically between $25,000 and $50,000 to establish the trusts and foundations used in the arrangement.
The strategy purported to allow taxpayers to divert nearly all of their income through a series of three “non-grantor” trusts and what was described as a “private family foundation,” substantially reducing or eliminating taxes on the income.
Prosecutors said the structure was fraudulent.
Conner admitted that he continued selling the tax shelters despite repeated warnings from attorneys and accountants that the arrangement was illegal. He also acknowledged receiving IRS materials explaining the problems with abusive trust tax shelters.
Conner wasn’t merely selling the strategy to others. He admitted using it himself between 2016 and 2021 to evade taxes on approximately $5.2 million of his own income.
Federal prosecutors said Conner worked with a network of tax and financial professionals in several states, including Colorado residents Timothy McPhee and Marcia Predmore; Nevada certified public accountant Weldon Wulstein; Wyoming bookkeeper Suzanne Thompson; Nevada resident Roderick Prescott; and Arizona tax preparer Kent Ellsworth.
Together, prosecutors said, members of the conspiracy caused false tax returns to be filed that improperly sheltered approximately $156 million in income, resulting in an estimated $43 million tax loss to the federal government.
Several of Conner’s alleged co-conspirators have already been convicted.
McPhee previously pleaded guilty to conspiracy to defraud the United States and tax evasion and was separately convicted in a wire-fraud case. He is serving a 151-month prison sentence.
Following a five-week trial in May and June, a federal jury convicted Predmore, Wulstein, Thompson and Prescott of conspiracy to defraud the United States and other tax-related felonies. All four are scheduled for sentencing in January 2027.
Ellsworth pleaded guilty to two counts of aiding and assisting in the preparation of materially false and fraudulent tax returns. His sentencing is scheduled for Dec. 7 in Arizona.
Conner pleaded guilty to conspiracy to defraud the United States and is scheduled to be sentenced Jan. 26, 2027. He faces a maximum sentence of five years in federal prison.
The final sentence will be determined by a federal judge after considering federal sentencing guidelines and other statutory factors.
IRS Criminal Investigation investigated the case. The Justice Department’s National Fraud Enforcement Division announced the guilty plea.
The case is part of a broader federal effort to target promoters and financial professionals who market tax arrangements designed to disguise income or improperly reduce customers’ federal tax liabilities.