National Audit Defense Network Associates Charged with Federal Tax Fraud
A federal grand jury in Las Vegas, NV had indicted Alan Rodrigues of Henderson, Nevada, Weston Coolidge of Las Vegas and Joseph Prokop of Upland, California, charging them with conspiracy and federal fraud charges in relation to their work in promoting a fraudulent tax product through the presently non-existent National Audit Defense Network (NADN), as outlined by the U.S. Department of Justice and Internal Revenue Service (IRS).
Rodrigues, a former pit boss and casino owner, served as NADN’s general manager; Coolidge, a Las Vegas business owner, was NADN’s chairman and president; Prokop, a former National Football League player, served as the national marketing director of Oryan Management and Financial Services (Oryan), based in Upland, California.
Oryan was allegedly a sole proprietorship that paid NADN commissions for selling Tax Break 2000, a shopping site on the Internet that was fraudulently touted as a way for customers to claim legitimate income tax credits and deductions under the American with Disabilities Act of 1990 (ADA) and the Internal Revenue Code.
These allegations led to the defendants being charged with one count of conspiracy to defraud the United States, 15 counts of aiding in the preparation of false tax returns, and five counts of mail fraud. NADN is accused of marketing its services through radio advertisements, talk radio and public appearances, resulting in 21,610 sales of Tax Break 2000 to consumers throughout the entire country.
The federal indictment outlines allegations that Tax Break 200 attempted to abuse provisions in the ADA allowing “disabled access credit”, which offsets necessary expenses related to alterations to make a business’s services comply with ADA’s accessibility requirements.
Defendants are charged with creating versions of Tax Break 2000 that were not accessible by disabled visitors. Allegations include that customers were informed purchasing additional modifications to Tax Break 2000 would legally entitle them to claiming the income tax credits or deductions for making their Web sites accessible to the disabled. They also allegedly set the price for these modifications at $10,475 to maximize the allowable deduction.
Additional allegations against the defendants include that attorneys were paid to write favorable opinions about the product, refuting NADN’s own legal memos which stated that Tax Break 2000 was illegal and could result in criminal charges. They are also accused of creating false IRS Forms 1099 which portrayed the impression that customers were generating commission income, and preparing false income tax returns on behalf of their customers.
The Justice Department’s Tax Division filed a complaint against the current defendants attempting to prevent the further sales activity surrounding Tax Break 2000 and any other fraudulent tax schemes on April 13, 2004. Shortly thereafter, NADN ceased operating in 2004, and filed bankruptcy in June of 2004. Prokop was enjoined in June 2004, and Coolidge and Rodrigues consented to permanent injunctions in April of 2005.
If convicted and found guilty of the current charges, each defendant could face up to 150 years in prison and multi-million dollar fines.