If the Internal Revenue Service starts asking about your taxes, you probably should not emulate these people:

		Chart: Cracking down on 'abusive trusts'

Dr. Max Harned, a Bruceton Mills, W.Va., general practitioner accused of telling agents, "I'd like a piece of you, I'd kick your butt" and "I'm a very good shot."

Burton F. Tucker, a Franklin County dentist who sent letters to the IRS challenging its authority to collect taxes.

Ronald Gardner, a security guard, constable and former professional wrestler from Pittsburgh who has been hiding from the IRS for a year.

Federal agents say these men are members of a new breed of tax cheat -- professionals, often medical providers with an anti-government bent, who transfer their businesses to bogus trust funds to evade taxes.

Such complex shelters used to be vehicles for the very rich or the sophisticated crime boss. But because of slick pitches by promoters, professionals of all kinds have been signing up for "abusive trusts," as the IRS calls them.

They take many forms, but they all involve transferring business assets into a series of trusts designed to disguise ownership.

In a legitimate trust, ownership is transferred to a trustee, who then controls the assets. With bogus trusts, taxpayers typically transfer income and expenses to domestic trusts and then pass them to another series of offshore trusts, often in tax haven countries in the Caribbean.

The owner never relinquishes control but stops filing returns while funneling income back to himself in the United States.

The whole arrangement is a shell game.

"The reality is that nothing has changed," says an IRS explanation. "The taxpayer still exercises full control over his business and assets."

In the Pittsburgh region, at least seven professionals are under indictment on charges of pulling some version of this scam, including two doctors and their wives in northern West Virginia, a West Virginia businessman, the Franklin County dentist, the owner of a security company in Westmoreland County and a Monroeville photographer.

Dr. Tucker is the only one who has been convicted; he pleaded guilty and is scheduled to be sentenced in August.

Starting in 1996, wrote a federal prosecutor, Dr. Tucker "claimed that his dental income was really earned by a trust entitled Zubov and Associates." He stopped filing personal tax returns in 1999 and wired money from the Zubov trust to offshore accounts.

In all, he is accused of evading nearly $500,000 in taxes.

Abusive trusts are among the top "dirty dozen" scams the IRS lists each year, and the tax division of the U.S. Justice Department has made prosecuting them a priority.

Those prosecutions aren't going unchallenged.

Las Vegas attorney Robert Alan Jones, who represents Dr. Harned and other clients in West Virginia, Missouri, Illinois and South Dakota, said some of these cases represent an "abuse of discretion" by the government.

Prosecutors previously brought criminal charges against promoters of trust schemes but filed civil actions against many of his 75 clients, he said. Now, "they're trying to make examples of people" with indictments.

The IRS and prosecutors do not deny that deterrence is their goal.

Andrew Hromoko Jr., agent and spokesman for the Criminal Investigation Division office in Pittsburgh, whose jurisdiction includes West Virginia, said he can't comment on specific cases, but he warned against abusing trusts.

"Taxpayers should be wary of any scheme that purports to allow the placement of money or other assets into a trust to avoid taxes while still retaining control of those assets," he said.

A proliferating scam

Shady trusts have often been promoted to the wealthy at a startup cost of up to $70,000. But in recent years promoters have been reaching a wider audience on Web sites and in hotel seminars by slashing the fee to as little as $3,500.

In many cases, depositors can use credit or debit cards to access offshore accounts in transactions that leave no bank record trail. Such arrangements are legal -- if the accounts are disclosed on U.S. tax returns.

But they often aren't.

The IRS has tried several strategies to combat the problem, such as its Offshore Voluntary Compliance Initiative, an amnesty program in 2003.

Several large promoters have also been prosecuted, including Innovative Financial Consultants in Arizona, Aegis Management Co. in Illinois, and Anderson's Ark and Associates in Washington state.

Now the users of their trust packages could be headed to jail.

Dr. Harned and another of Mr. Jones' clients, Cleveland J. Biller, for example, bought their trusts through Aegis and both are under indictment in Clarksburg, W.Va.

Mr. Jones vowed that he'd win both cases.

The IRS says Mr. Biller, 62, a rancher from Morgantown, W.Va., concealed $1.1 million in a bogus business trust.

But Mr. Jones said Mr. Biller actually used the trust to protect his other assets from liability after he bought an abandoned, contaminated glass plant in 1996. He also said Mr. Biller has paid "every dime" he owed the government.

He said Dr. Harned has paid back what he owed, too.

Yet he acknowledged that his clients have antagonized the IRS with arguments typical of tax protesters.

Mr. Biller has mailed back IRS summonses for documents with the stamp "Refused for Fraud," a common tactic. Among his many letters to the agency was one that insisted "there is no legitimate enforcement power granted to the IRS by Congress."

Dr. Harned took his vitriol to an extreme, but on the advice of Mr. Jones has since backed off.

Although he denies threatening agents in 2003, he has apologized. He also wrote a letter to U.S. District Judge Irene Keeley regretting his "lack of graciousness" in a court appearance, saying that his attitude was driven by a belief that the government was abusing him.

"I realize that my personal opinion regarding the legality of my business trusts was and is not an excuse for me to question the authority of the United States government to execute and administer the tax laws fairly and efficiently," he wrote.

Judge Keeley is also handling the case of Dr. Doyle Sickles, a well-known orthopedist in Clarksburg indicted in April along with his wife on charges of setting up three fake trusts.

Dr. Sickles ignored the advice of his accountant and then fired him, claiming that he and his wife are not U.S. citizens.

These kinds of cases normally don't end well for defendants.

The biggest one locally was brought against Daniel Leveto, a Meadville veterinarian with ties to the militia movement who promoted a book called "TAX FREE! How the Super Rich Do It!" by Donald Turner.

Mr. Leveto sold his practice to a dummy corporation called Center Co. Inc. in the Turks and Caicos Islands. He transferred money from his veterinary practice to Center Co. accounts, then to a series of Caribbean trusts, and then back to Center Co.

After his indictment, Mr. Leveto fled to Belize, South Africa, Mexico and Canada before he got caught at an Ohio truck stop. Last year he went to prison for four years.

Mr. Turner, of the Netherlands, remains a fugitive.

Wrestler on the run

Also a fugitive is Mr. Gardner, 49, a former pro wrestler indicted last year under seal.

The owner of Gardner Detective Agency and a constable in Jenner Township, Somerset County, he and his former wife lived in a fancy Laurel Mountains house and provided security for businesses, including Kenny Ross Chevrolet and the Mountain View Inn near Greensburg.

"He always struck me as a guy who wanted to be a cop. He liked the uniform," said Mark Conte, manager of the Mountain View. "He was a big guy. You wouldn't want to tangle with him. But he was a nice guy. He always did his job."

Mr. Conte said he never heard Mr. Gardner espouse anti-government sentiments. But several years ago, he said, IRS agents showed up at the inn to ask for canceled checks and he knew Mr. Gardner was in trouble.

In the late 1990s, Mr. Gardner became a client of Arizona-based Innovative Financial Consultants. According to the indictment, he bought a trust package and incorporated his business under the Gardner Detective Agency Trust.

He provided false taxpayer identification numbers to his employers, paid his employees and expenses in cash, and stopped filing returns.

He also bought a second trust, Highlander Group Trust, into which he transferred the deed to his house and the title to his 1993 Lincoln. Somerset County records indicate one of the trustees was David W. Trepas, a promoter for Innovative Financial Consultants who has since been convicted.

Court records also show that Mr. Gardner and a longtime friend, Gary Diehl, who is under indictment for failure to file tax returns, have themselves acted as trustees.

In 2000, a Ligonier couple transferred a piece of land to the Thistle Group Trust, with Mr. Gardner and Mr. Diehl both listed as trustees.

Mr. Gardner and Mr. Diehl have been associates for years and once ran a video business together in which they sold wrestling movies.