RUSSELL J. BROWN, a businessman from Teton County, Wyoming, pleaded guilty in U.S. District Court in Seattle to aiding and assisting in the filing of a false tax return of Paul D. Bekins. Bekins is the former President, Treasurer and majority stock owner of Bekins Moving and Storage in Seattle, Washington. Bekins pleaded guilty for his role in this offense in September 2004.

Brown and Bekins were both members of Tower Executive Resources (Tower), an organization based in Denver, Colorado which assisted its members evade federal income taxes. Tower was operated by Paul D. Harris, Lester R. Retherford, and Robert N. Bedford. Tower helped its members set up offshore bank accounts and offshore corporations to hide income from the IRS. Most of these offshore corporations were established in the Turks and Caicos Islands in the British West Indies, a known tax haven. While these corporations were owned on paper by a local taxicab driver from the Turks and Caicos Islands, they were actually controlled by the Tower members. Taxpayers paid up to $50,000 to join Tower and use its services. Harris and Retherford were convicted after a lengthy trial and are currently incarcerated. Bedford is scheduled to go to trial in Denver later this year. Over the years, numerous other Tower members from around the country have been prosecuted for tax fraud as part of this scheme.

According to the plea agreement, Brown assisted Bekins in attempting to evade federal income taxes through a series of complicated schemes designed by Tower. The schemes were designed to move income earned by Bekins, through corporations controlled by Brown, and into offshore corporations controlled by Bekins. In one such scheme, Brown funneled approximately $2.5 million from the sale of Bekins Moving and Storage’s records storage business through one of Brown’s corporations and into Bekins’s offshore corporation. Subsequently, Bekins failed to report this income on his tax returns. As a result, Brown helped Bekins evade approximately $1.3 million in federal income taxes. Brown will be sentenced later this year.

This case was investigated by the Internal Revenue Service - Criminal Investigation, and prosecuted by Senior Litigation Counsel Robert Westinghouse and Department of Justice Trial Attorney Robert Livermore.

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.

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