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Thursday, October 20, 2016

U.S. District Judge Rejects Tax Promoters’ Plea Agreement in United States v. Crithfield: A Rare Event, but a Warning to Defense Counsel

The Very Real Pirates of the Caribbean

Duane Crithfield and Stephen Donaldson led the captive insurance promoter Foster & Dunhill, which marketed a Business Protection Plan (BPP) that the government alleges was fraudulent. In the latest twist in the prosecution of the two promoters, a judge in the U.S. district court for the Middle District of Florida has rejected a plea agreement reached by the defendants and the prosecution, even though the Court had previously accepted it, because there was no “meeting of the minds.”1 This unconventional move by the judge is not only surprising, but offers a cautionary tale and some lessons for defense counsel.

In May 2013, Crithfield and Donaldson were indicted for promoting a tax shelter scheme relating to their marketing of a captive insurance arrangement, known as the Business Protection Plan (BPP). Both were charged with conspiracy to evade taxes, and aiding and assisting fraud and false statements pertaining to two particular clients (each client constituted a separate count).

"Furthermore, it is possible that defendants may now be in a worse position, not only because they have no plea agreement in hand that limits their exposure to three years and may instead be found guilty of all the charges and thus increase their exposure to 11 years (not to mention the legal fees that will be required to try the case), but also because this tactic likely frustrated both the prosecution and the court" 



"The Real Pirates of the Caribbean Playing Now in Tennessee" was a featured blog authored by us wherein we revealed that Tennessee Trust Promoters and their Attorney were promoting the services of Stephen Donaldson to their Clients without disclosing that Donaldson was under Federal Indictment.

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