Denver Tax Fraud Lawyers

Last Updated on: 13th December 2025, 01:30 pm

Denver Tax Fraud Lawyers: When Tax Shelter Promoters Ignore Professional Warnings

Timothy McPhee ran a tax shelter operation out of Estes Park, Colorado. He charged clients between $25,000 and $50,000 for a package of trusts that would let them pay taxes on only 2% of their income. The sales pitch was simple – create a private family foundation and three trusts, assign your business income to those trusts, and suddenly most of your income isn’t taxable anymore.

Accountants told McPhee the scheme was illegal. Attorneys told him it was fraudulent. He ignored them. He kept selling the shelters to clients across the country. He kept teaching them how to file false tax returns that made it look like their income belonged to the trusts, not to them. The scheme caused $45 million in tax losses to the federal government.

When federal prosecutors finally charged McPhee, he pleaded guilty to conspiracy to defraud the United States, tax evasion, and wire fraud. He faces up to 30 years in federal prison. The tax shelter he promised would save his clients money destroyed his life – and created criminal exposure for everyone who bought what he was selling.

The Tax Shelter That Cost $45 Million

Heres exactly what Timothy McPhee did wrong. From 2018 through 2023, he promoted a fraudulent tax shelter to taxpayers across the country. The structure involved a private family foundation and three trusts – a business trust, a family trust, and a charitable trust. The promise was that clients who used these entities could legally avoid paying taxes on nearly all there income.

McPhee charged between $25,000 and $50,000 per client for this package. People paid tens of thousands of dollars for a scheme that prosecutors would eventualy call fraudulent.

But heres the kicker. McPhee didnt stumble into fraud unknowingly. He acknowledged in his guilty plea that he gave directions to clients that he knew directly contradicted IRS guidance. He deliberatly ignored warnings from accountants and attorneys that the tax shelter was illegal. Professionals in his own field told him he was crossing the line. He crossed it anyway – for years.

And McPhee didnt stop at tax fraud. From January 2023 to February 2024, he and a co-conspirator caused more then 50 investors to send approximately $8 million to bank accounts they controlled – promising the money would be used for foreign exchange trading. It wasnt. The investment fraud ran alongside the tax fraud.

Filing Returns For Dead People

Thomas William Quintin had a long criminal history before he started filing tax returns in the names of deceased individuals. Starting in July 2009, Quintin and his co-conspirators submitted thousands of false federal income tax returns claiming a total of $1,834,011 in refunds. The returns were filed in the names of dead people. And heres how they found those dead people: ancestry.com.

Think about the audacity of that scheme. Quintin used a genealogy website – the same one millions of Americans use to trace there family history – to identify deceased individuals whose names and Social Security numbers he could steal.

The operation ran out of Total Tax Services in Englewood, Colorado. The assembly-line approach to identity theft generated nearly $2 million in fraudulent refund claims before investigators shut it down.

And heres the thing about Thomas Quintin. This wasnt his first fraud conviction. He had previously fled to the Cayman Islands to avoid sentencing in a California tax evasion case. While on the run, he was indicted for failing to pay $11 million in fuel taxes from gas stations he owned in Wyoming and Nebraska. The serial fraudster who thought he could keep running eventually ran out of room to run.

The Tax Preparer Who Wasnt A CPA

Thuan Bui operated a tax preparation business in Littleton, Colorado from 2016 to 2021. He told clients he was a certified public accountant. He wasnt. That lie set the stage for everything that followed.

On hundreds of tax returns, Bui understated his clients tax liability by overstating or falsely creating expenses on Schedule C forms. The clients thought they were getting professional help from a licensed CPA. They were getting fraudulent returns from someone who had no professional credentials at all.

His sentence: 36 months in federal prison – the statutory maximum. The judge imposed the highest possible sentence, signaling exactly how seriously the court viewed both the fraud and the false credential claim.

99 Dependents On A W-4

Steven Darbee of Brighton, Colorado decided to avoid federal income tax by a method so absurd it almost sounds made up. He claimed 99 dependents on his W-4 forms. Ninety-nine.

Darbee was actualy entitled to claim two allowances. He claimed 99 – and at one point claimed he was completely “exempt” from federal taxes. The result was predictable. His employers withheld almost nothing. Darbee didnt file tax returns. From April 2013 through January 2021, he evaded the assessment of federal income tax through this transparantly false scheme.

His sentence: 12 months and one day in federal prison. He was ordered to pay $308,370.59 to the IRS in taxes, interest, and penalties.

The $0.01 Bank Account Strategy

Frank Stevens of Bow Mar, Colorado had a creative approach to IRS collection. He kept his bank account balances at $0.01 – one penny. Low enough that the IRS couldnt levy the accounts. But the strategy proved something prosecutors found very useful: Stevens knew he owed money.

Stevens co-owned restaurants and an oil production business. From at least 2002 and continuing for years, Stevens didnt pay those withheld taxes to the IRS. He didnt file the required payroll tax returns. The money that should have gone to the government stayed in his businesses.

A federal grand jury indicted Stevens on tax evasion, failing to pay over employment taxes, and failing to file tax returns. The penny-balance strategy that was supposed to protect his money exposed him to years in federal prison.

The Dentist Who Used The Tax Shelter

Ryan Ulibarri owned and operated Ulibarri Family Dentistry in Fort Collins, Colorado. Since 2014, he built a successful dental practice. From 2017 through 2022, he used a tax shelter to hide more then $3.5 million in income from the IRS.

Ulibarri pleaded guilty to six counts of tax evasion. Six separate years of using an illegal structure to conceal the income his dental practice generated.

And the accountant? Rodney Ermel of Colorado Springs got 30 months in federal prison and was ordered to pay $8,087,385 in restitution to the IRS. The professionals who are supposed to ensure tax compliance became defendants themselves.

Colorados Dual Prosecution Reality

Colorado has a 4.4% flat state income tax. Unlike states without income tax, this creates exposure at BOTH the state and federal level. Tax fraud in Denver can be prosecuted by the Colorado Department of Revenue AND federal prosecutors – creating potential for consecutive sentences and compounding penalties.

The coordination between state and federal authorities means investigations often overlap. State auditors discover issues that get refered to federal prosecutors. The exposure multiplies rather then simply overlapping.

The District of Colorados Approach

The District of Colorado maintains an Economic Crime Section specifically designed to handle financial crimes including tax fraud. By the time charges get filed, investigations have been running for months or years.

Heres what that means for anyone facing tax fraud exposure in Denver. If you recieve a target letter from the U.S. Attorneys Office for the District of Colorado, the investigation is already substantialy complete. Your not at the beginning of a process – your near the end of an investigation thats been running without your knowledge.

The sentences are real. Timothy Stubbs got 88 months – more then seven years – for failing to report income from a business that made $7 million. Thuan Bui got 36 months – the statutory maximum.

Defense Strategy In Denver

If your facing tax fraud exposure in Denver, the calculus involves understanding how the District of Colorado operates.

The McPhee case shows what happens when you ignore professional advice – accountants and lawyers warned him, he proceeded anyway, now he faces 30 years. The Quintin case shows that serial fraudsters eventualy run out of room to run. The Bui case shows that false credentials trigger maximum sentences.

The time to address tax fraud exposure is before any of that happens. Voluntary disclosure programs exist. Coming forward before the IRS finds you creates opportunities to resolve issues civily – with penalties and interest, but potentialy without prison.

If theres tax fraud exposure in your situation – unreported income, aggressive tax shelters that crossed the line, returns prepared by someone now under investigation – the time to address it is before anyone starts looking. Appeals go to the Tenth Circuit Court of Appeals. The 90% federal conviction rate means most people who get charged get convicted.