Texas man pleads guilty in $43 million IRS tax shelter fraud scheme

A Frisco, Texas, man pleaded guilty to conspiring to defraud the IRS through a fraudulent tax shelter scheme. The conspiracy caused an approximate $43 million tax loss to the IRS, the Justice Department announced.

According to court documents cited by the department, Larry C. Conner, 69, promoted an abusive trust tax shelter to clients nationwide from at least February 2018 through September 2023, including at in-person seminars conducted in the name of The Business Solutions Group. The scheme involved routing nearly all of a taxpayer’s income through three purported “non-grantor” trusts and a so-called “private family foundation” to evade the assessment of taxes owed on that income, prosecutors said. Conner typically charged clients between $25,000 and $50,000 for the trusts and foundations.

Prosecutors said Conner admitted that he knew the shelters were fraudulent, citing repeated warnings from attorneys and accountants as well as his knowledge and receipt of IRS-published materials describing the illegal nature of abusive trust tax shelters. He also admitted to personally using the shelter from 2016 through 2021 to evade income taxes on about $5.2 million of his own income, according to the Justice Department.

Conner admitted to promoting the scheme in concert with several individuals, among others: Colorado couple Timothy McPhee and Marcia Predmore; Nevada certified public accountant Weldon Wulstein; Wyoming-based bookkeeper Suzanne Thompson; Mesquite, Nevada, resident Roderick Prescott; and Arizona-based tax preparer Kent Ellsworth. Conner and his co-conspirators caused the filing of false tax returns that fraudulently sheltered approximately $156 million in income, resulting in an approximate $43 million tax loss to the IRS, according to the department.

McPhee previously pleaded guilty to conspiracy to defraud the United States, tax evasion and, in a separate case, wire fraud. He is serving a 151-month prison sentence. Following a separate five-week trial held throughout May and June 2026, a jury convicted Predmore, Wulstein, Thompson and Prescott of conspiracy to defraud the United States and other tax-related felonies. All four are scheduled to be sentenced in January 2027.

Ellsworth pleaded guilty to two counts of aiding and assisting in the preparation of a materially false and fraudulent tax return. He is awaiting sentencing in the District of Arizona on Dec. 7.

Conner pleaded guilty to conspiracy to defraud the United States and is scheduled to be sentenced Jan. 26, 2027. He faces a maximum penalty of five years in prison. A federal district court judge will determine his sentence after considering the U.S. Sentencing Guidelines and other statutory factors, according to the Justice Department.

Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division announced the plea. IRS Criminal Investigation investigated the case. Lauren K. Pope and Amanda R. Scott, both formerly of the Criminal Division’s Tax Section, prosecuted the case.