A federal jury in the District of Colorado convicted four individuals today of conspiracy to defraud the United States for their operation of an abusive trust tax evasion scheme that caused approximately $40 million in losses to the United States.
Federal prosecutors said the defendants carried out an abusive trust-based tax scheme that was designed to help clients avoid paying federal taxes through sham trusts, misleading claims, and fraudulent transactions.
Colin M. McDonald, Assistant Attorney General for the National Fraud Enforcement Division, said schemes like this damage public confidence in the tax system, deprive the government of needed revenue, and shift the burden onto law-abiding taxpayers. He said the convictions reflect the Fraud Division’s continued focus on prosecuting those who promote and profit from abusive tax shelters and other fraud schemes.
Amanda Prestegard, Special Agent in Charge of IRS Criminal Investigation’s Denver Field Office, said the defendants had been warned by attorneys, CPAs, financial professionals, and IRS guidance that the trust arrangement was unlawful, but chose to continue anyway. She said the conspiracy was intended to hide income, weaken the integrity of the tax system, and enrich the promoters through false claims. Prestegard said IRS-CI appreciates the jury’s verdict and will continue working with the Department of Justice to pursue individuals who promote or participate in criminal tax schemes.
According to court records and evidence presented at trial, Marcia Predmore, Roderick Prescott, Suzanne Thompson, and Weldon Wulstein promoted an illegal “layered” trust tax shelter to hundreds of high-net-worth business owners across the country. The shelter involved four separate trusts: a business trust, a family trust, a charitable trust, and a private family foundation.
Prosecutors said the defendants taught clients how to use the structure to avoid paying federal income taxes on as much as 98% of their business profits. The scheme allegedly relied in part on improper deductions for personal living expenses and fraudulent charitable contributions. Some of the promoters marketed the shelter at seminars around the country, telling clients that the arrangement would allow them to “own nothing, control everything.” Clients paid between $25,000 and $50,000 to set up the structure.
Wulstein, a CPA, prepared hundreds of false tax returns for clients who bought into the tax shelter. He worked with Thompson, who ran a bookkeeping firm and prepared financial statements for the clients’ trusts.
Prescott, who had previously been convicted of tax evasion and permanently barred from promoting abusive tax shelters, promoted the private family foundation component, which served as the final layer of the scheme. Prosecutors said Prescott instructed clients on how to claim deductions for money transferred to the foundation while still maintaining control over the funds for their own personal use.
Predmore, a registered life insurance agent, promoted the shelter through a business she operated with her spouse. In December 2025, her spouse, Timothy McPhee, was sentenced to 151 months in prison for conspiracy, tax evasion, and wire fraud. Those charges were tied both to his role in the trust scheme and to his operation of a multi-million-dollar investment fraud scheme known as the ROI Cash Flow Fund.
Thompson and Wulstein were each convicted of six counts of assisting in the preparation of false tax returns for clients who purchased and used the fraudulent shelter. Predmore was convicted of six counts of tax evasion based on her own use of the same shelter she promoted to others.
Each of the four promoters faces up to five years in prison for conspiracy to defraud the United States. Thompson and Wulstein also face up to three years in prison for each count of assisting in the preparation of false tax returns. Predmore faces up to five years in prison for each tax evasion count. Sentencing will be determined by a federal district court judge after consideration of the U.S. Sentencing Guidelines and other statutory factors.
IRS Criminal Investigation handled the investigation.
Trial Attorneys Lauren K. Pope and Patrick Burns of the Criminal Division’s Tax Section are prosecuting the case.
On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division, also known as the Fraud Division. The division is focused on investigating and prosecuting fraud against the American people. Its work supports President Trump’s Task Force to Eliminate Fraud, a government-wide initiative chaired by Vice President J.D. Vance that is aimed at eliminating fraud, waste, and abuse in federal benefit programs.