usdoj.gov | 11/24/08 | $25 million | suspect: GSL Advisory Solutions | victim: IRS
A San Francisco federal judge has ordered Edwin Lichtig III and his Walnut Creek, Calif.-based firm, GSL Advisory Solutions, to stop promoting unlawful tax schemes, the Justice Department announced today. The defendants agreed to the permanent injunction order without admitting the government's allegations against them. The United States sued Lichtig and GSL alleging that they promoted tax fraud schemes involving Individual Retirement Accounts (IRAs) that helped customers improperly avoid federal income tax on more than $25 million.
According to the federal suit, Lichtig, a Lafayette, Calif., insurance salesman, promoted a scheme called PAT (Pension Asset Transfer). It allegedly helped customers improperly avoid income tax on untaxed assets held in their IRAs through the use of a series of transactions with sham businesses, self-employed retirement accounts and understatements of the value of life insurance policies. The government complaint said a second scheme called FROCO (Financed Roth Conversion Strategy) allegedly helped customers use annuities to transfer funds from their traditional IRAs to Roth IRAs without paying the proper amount of tax that is imposed on such transfers.
