Felon ran $1.5B tax scam, then bought Rolls Royce
A Texas felon was charged with running a tax scam that helped wealthy clients hide more than $1.5 billion in income from the IRS, using the proceeds to buy a 2021 Rolls Royce Ghost and make a down payment on an Ocean Alexander 28E yacht.
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Duncan John MacDonald and three others were accused of making millions of dollars by selling phony trusts that they claimed would let clients defer payment on taxes in perpetuity, according to an indictment. The so-called tax shelter cheated the Internal Revenue Service out of more than $200 million in taxes, according to
MacDonald, who served time in jail for fraud a decade ago, pleaded not guilty on Wednesday in Dallas federal court. A judge ordered him detained without bail after prosecutors said he posed a “serious risk” to flee and obstruct justice, court records show.
“The defendants orchestrated a sprawling, multimillion‑dollar operation that encouraged wealthy clients to hide their income behind fraudulent trust structures, depriving the United States Treasury of more than $200 million in lawfully owed revenue,”
Federal prosecutors highlighted the MacDonald indictment Wednesday when citing tax fraud cases brought recently by the Justice Department’s National Fraud Enforcement Division against more than 70 people. The IRS has long prosecuted promoters of so-called abusive tax shelters, and Raybould is targeting white-collar prosecutions.
Raybould’s office provided a copy of the indictment, which wasn’t immediately available in court records. MacDonald’s lawyer couldn’t be immediately reached for comment.
MacDonald pleaded guilty in 2013 in a healthcare fraud case and was sentenced to five years in prison. At the time of his 2014
MacDonald’s co-defendants in the new case include Sarah Duren. For years, MacDonald and Duren “held themselves out publicly as married,” prosecutors said. Duren appeared Wednesday in court, where she pleaded not guilty.
“We anticipate that she is an innocent spouse and relied on the wisdom of her husband, maybe to her detriment,” her lawyer James Whalen said. They entered into a common-law marriage after his release from prison, he said.
In the new case, prosecutors allege that MacDonald and his conspirators charged many clients more than $100,000 to set up sham trusts, claiming they could avoid taxes while continuing to control their income and assets. MacDonald, who ran a company called Economic Strategist and other firms, told clients the trusts would allow them to “own nothing but control everything,” prosecutors alleged.
MacDonald and Duren hired a company to remove negative information from the internet about his company and his prior fraud conviction, according to the indictment.
The indictment cited several warnings that tax lawyers gave to clients about the phony trusts.
“It remains my very strong recommendation to take steps to rectify the situation and to mitigate your criminal exposure,” one lawyer wrote. Another wrote: “It’s tax fraud and those provisions don’t allow for free tax gains.”
MacDonald is charged with tax evasion, wire fraud, monetary transactions with criminally derived property, conspiracy to defraud the U.S., and aiding and assisting in the preparation of false income tax returns.
The case is U.S. v. MacDonald, 26-cr-652, U.S. District Court, Northern District of Texas (Dallas).
