PAUL D. BEKINS, 45, former President, Treasurer and majority stock
owner of Bekins Moving and Storage in Seattle, WA pleaded guilty in
U.S. District Court in Seattle to Filing a False Tax Return. According
to the charging information, on his Form 1040, BEKINS declared his "Other
Income" in 1999 to be only $77,515 when in fact BEKINS knew the
correct amount was $2,652,617.
Bekins Moving and Storage has operated in the Northwest for more than
a century. PAUL D. BEKINS, a 4th generation member of the Bekins family,
took over as president of the company in 1988. In 1998 and 1999 BEKINS
sold off assets of Bekins Moving and Storage and attempted to hide more
than $3.7 million in income from these sales in off shore accounts.
The complex scheme was designed to help BEKINS avoid more than $1.3
million in taxes.
According to the plea agreement,
BEKINS paid $50,000 to attend a seminar and join a group called Tower
Organization of Worldwide Executive Resources (Tower) incorporated in
the Turks and Caicos Islands, British West Indies. The company was operated
primarily by Paul D. Harris and Lester R. Retherford. Tower created
international business corporations that did not have any independent
economic reality or represent ongoing businesses, but in whose names
bank accounts and securities trading accounts were opened in the United
States, the Turks and Caicos Islands, and elsewhere. Tower members were
then allowed to use the international business corporations to evade
paying income taxes. Harris and Retherford currently face trial in U.S.
District Court in Denver for operating the scheme intending to evade
income taxes. As part of his plea agreement BEKINS will testify at the
upcoming trial. (Also view the Information).
The plea agreement details numerous elaborate schemes, all of which
involved the laundering of corporate funds through offshore bank accounts.
BEKINS caused substantial portions of these laundered funds to be transferred
back to him. BEKINS intentionally concealed these funds from his corporation
and from the IRS. In one such scheme BEKINS arranged for the sale of
a records storage business owned by the corporation. To conceal the
actual sales price BEKINS caused a ficticious settlement statement to
be prepared reflecting a sale price for the business that was $2.5 million
less than the amount paid to the corporation. BEKINS caused this amount
to be transferred offshore to gain personal control of the funds. He
intentionally caused his 1998 federal income tax return to be filed
without reporting any portion of this laundered amount. In so doing
he evaded more than $1.3 million in federal income taxes.
BEKINS will be sentenced in 2005 following his testimony against Harris
and Retherford. As part of his plea agreement BEKINS has agreed to pay
back taxes, penalties for tax fraud, and the costs of prosecution.
This case was investigated by the Internal Revenue Service, Criminal
Investigations Division, and prosecuted by Senior Litigation Counsel
Robert Westinghouse and Assistant United States Attorney Annette Hayes.
For additional information please contact Emily Langlie, Public Affairs
Officer, United States Attorney’s Office for the Western District of
Washington at (206)553-4110.
