Renton man guilty of tax fraud

A Renton man who built a $40 million business advising people how to "opt out" of paying federal income taxes has been convicted of tax evasion and conspiracy to defraud the U.S. government.

David Struckman, who was arrested last year in Panama, could face up to 20 years in prison and a $1 million fine as the result of his conviction Thursday by a federal jury in Seattle.

Struckman was a co-founder of the Institute of Global Prosperity, which sold audiotapes and tickets to offshore seminars promoting "sovereignty" — the notion that taxpayers could choose to become free of the federal government's jurisdiction, federal prosecutors said in court papers.

The institute advised clients to discontinue the use of Social Security numbers and conceal income with the use of trusts and foreign bank accounts.

Struckman followed that advice himself, according to the government, which charged him with evading taxes on millions of dollars of income earned between 1999 and 2001.

"Stopping tax schemes at the source is a high priority in tax enforcement," said Richard Morrison, acting assistant attorney general for the Justice Department's Tax Division, in a written statement. "People who sell or use these scams can expect serious trouble."

An attorney for Struckman could not be reached Saturday.

In court papers, Struckman's attorneys argued the government failed to prove that he intentionally defrauded the IRS and said that he "believed in good faith" that he was not breaking the law.

Struckman is part of a national movement of tax protesters who dispute the government's authority to impose an income tax.

In 1997, Struckman submitted a signed affidavit to the Washington secretary of state declaring he was no longer a U.S. citizen but rather a citizen of the "Sovereign Republican State" of his residence.

In 2001 he filed a "declaration of independence" with the King County Recorder's Office informing President Bush and other government officials that he was "no longer subject to taxation and control."

Struckman and his Global Prosperity business partners tapped anti-tax sentiment to build a lucrative business that made more than $40 million in gross receipts between 1996 and 2001, according to federal prosecutors.

Their business started out marketing a 12-cassette tape series called "Gateways to Financial Freedom." As the business grew, Struckman and his partners recruited a network of sales people for offshore seminars promising to show customers how to transfer their property to untaxable trusts. Tickets to a five-day seminar were sold for as much as $37,500.

By hiding Global Prosperity income in various trusts and offshore accounts, Struckman and his partners became "products of the product" they were selling, prosecutors said in court papers.

Struckman and four business partners were indicted in 2004 for the tax-evasion schemes. The other four have pleaded guilty to various charges of tax evasion, conspiracy and failing to file tax returns.

Struckman fled to Panama, where he was arrested last year and deported to the U.S. to face trial. His sentencing is set for March.

Several other people connected to the business also have been convicted of tax-related crimes, including Laura Jean Marie Struckman, of Renton, who was described by authorities as David Struckman's estranged wife when she was sentenced to 21 months in prison in 2003.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com