United States Attorney's Office Press Release No. 10-151
October 20, 2010
MAN WHO PROMOTED ASSET PROTECTION STRATEGY TO AVOID TAXES SENTENCED TO 18 MONTHS IN FEDERAL TAX CASE
LOS ANGELES – A man who promoted schemes to avoid the payment of federal income taxes has been sentenced to 18 months in federal prison for filing false tax returns with the Internal Revenue Service that significant'tly understated his true income.
Dana Ray Reynolds – who according to court documents previously owned houses in Yorba Linda and Huntington Beach – was sentenced Monday by United States District Court Judge A. Howard Matz. In addition to the prison term, Judge Matz ordered Reynolds to pay $193,812 in restitution to the IRS.
Reynolds, who operated Repackaging America, Inc. and Incorporating You, Inc., pleaded guilty on the eve of his trial in May to two counts of subscribing to false tax returns. According to court documents, Reynolds developed strategies to conceal assets and income through the creation of corporations. Reynolds used videotapes, seminars and written materials to market his strategies, which he promoted by highlighting his own elaborate lifestyle that he claimed was made possible by following the plans he developed.
Following his own strategies, Reynolds paid personal expenses with money he had funneled through his corporations. According to the court documents, Reynolds also placed assets – such as automobiles, recreational vehicles and at least one vacation home – in the names of the corporations. IRS investigators found evidence that Reynolds used corporate checks to pay workers, including a person hired to completely redesign his Yorba Linda home, for which he ordered a custom, $80,000 bathroom.
For the tax years 2002 and 2003, Reynolds used more than $400,000 from corporate accounts for his own personal benefit, and none of that income was reported to the IRS.
The investigation of Reynolds was conducted by IRS-Criminal Investigation’s Los Angeles Field Office.