Costa Rica-Based Scam Results in US Tax Fraud Charges
By Michael Moore, The Missoulian

A Polson, Montana, woman charged in federal court in Missoula with filing false tax returns was one of hundreds who allegedly took part in a multinational scheme to evade U.S. taxes.

Ellen Sloan has been charged with four counts of filing false tax returns, starting in 1998. Sloan's tax returns showed losses of hundreds of thousands of dollars in an entity called Shore View Ventures.

Sloan is a Polson businesswoman with numerous real estate holdings. The government alleges that she took part in an illegal, multinational tax "shelter" to avoid paying taxes on real-estate transactions.

Shore View, according to prosecutors and the Internal Revenue Service, was a general partnership set up in Nevada by an organization known as Anderson's Ark and Associates.

The government claims that Anderson's Ark, run by Keith Anderson, his brother and others, stashed away in offshore accounts money from about 1,500 people. Anderson's Ark then filed fraudulent tax returns for those people, claiming the money had been spent on a variety of legitimate deductions, including losses in fictitious businesses such as Shore View Ventures.

The tax forms Sloan filed for 1998 showed a "non-passive" loss of $407,360 in Shore View, giving her a net-operating loss for the year, court records state.

Sloan's 1999 tax form showed a loss of $575,130 related to her involvement in Shore View, court records state.

Sloan's attorney, Morgan Modine, said his client may actually be a victim of Anderson and Anderson's Ark. According to the IRS, Sloan was one of about 1,500 people who allegedly tried to hide their assets through Anderson's Ark, which was masterminded by Anderson.

Modine said that Sloan believed she was taking part in a legal business arrangement and that she would, in fact, have to eventually pay taxes on money earned from real-estate sales.

"Basically, this company had a bunch of underlings running around the country and convincing people that these were legal ways to cut back on their taxes," Modine said. "But in a lot of cases, the people who took part in this wound up being the victims. I think that's what happened to my client."

In fact, at Anderson's trial there was considerable evidence that many of the Ark's clients lost their money.

Anderson, who was arrested in Costa Rica in 2002 and eventually returned to the United States for trial, was convicted at trial on a host of charges, including mail and wire fraud, money laundering and assisting with the filing of false tax returns.

According to court records in Anderson's case, which was tried in Seattle, Anderson's Ark took in more than $31 million from its clients, filed false returns on their behalf, then set up offshore accounts where the clients could withdraw their money with debit cards.

In some cases, however, there was no money left to withdraw, Modine said.

"In my client's case, I think she lost every cent she gave to Anderson and his people," Modine said.

Keith Anderson, 63, believed that neither he nor others were subject to government taxes.

In a series of tapes about "financial freedom," he said the following: "I started researching and studying constitutional law and taxation to find out what the problem was because all these taxes we were paying to the government did not make any sense to me. That endeavor led me to study constitutional law, which revealed the fact that there was no lawful basis for the Social Security program or the income tax or the Social Security tax."

Anderson claimed that many of his ideas about taxes and wealth came from the Bible.

At his trial in Seattle last December, Anderson represented himself, arguing that the court had no jurisdiction over him because he was a human being rather than a "legal fiction entity," his description of those who have a Social Security card.

According to a story in the Seattle Post-Intelligencer, after his conviction, Anderson told the court: "I do not recognize legal fictions. I remind you that I retain all my God-given rights and have never consented to this jurisdiction."

Anderson's Ark will be the focus of considerable attention should Sloan's case go to trial. She has pleaded not guilty and asked for a trial sometime in September, Assistant U.S. Attorney Kris McLean said Tuesday.