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Wife Accused Of Promoting Abusive Trust Schemes Must Keep GPS Monitor

Wife Accused Of Promoting Abusive Trust Schemes Must Keep GPS Monitor

According to Law360, a wife indicted with her husband on tax evasion charges relating to an abusive trust scheme should not be allowed to remove her ankle monitor, the U.S. government told a Colorado federal court, saying her previous tracking devices sustained suspicious damage.

Marcia Predmore's GPS monitoring devices have already broken twice since September, when a federal magistrate judge ordered her to start wearing a monitor while she awaits trial on charges that she and her husband illegally avoided paying $2 million in personal income taxes from 2016 to 2021, prosecutors said Thursday. 

Though Predmore claimed the breakage happened while she was sleeping or putting on shoes, evidence shows the same plastic piece on the device was shattered in more than one place both times, prosecutors said in a motion opposing her request to remove the device.

Predmore, who is 64 and could face roughly five years (5) in prison, is also a flight risk; a fact that hasn't changed since U.S. Magistrate Judge Susan Prose decided after a two-hour hearing that she should wear the monitor, prosecutors said. Predmore has a visa allowing her to work in Dubai and the resources to charter a private plane there, prosecutors said. She and her husband earned an estimated $1.8 million in 2021 and are signatories on at least 14 bank accounts, according to the motion.

Predmore and her husband, Timothy McPhee, have pled not guilty to all the charges in their indictment, which was unsealed on September 25, 2023, Where the couple are accused of evading their own taxes using a scheme McPhee and his Texas-based business partner, Larry Conner, are accused in the indictment of peddling to other business community starting in 2017.

According to the allegations, McPhee and Conner promoted their strategy at hotel seminars in Colorado, Texas and Mexico, charging customers $25,000 to $50,000 for help diverting their earnings into sham trusts and a purported charitable foundation. McPhee and Conner showed their customers how to use the trusts to hide business income and illegally deduct personal expenses such as family weddings, the indictment said. Conner pled not guilty to the charges, which include conspiracy to defraud the government, in October.

Prosecutors criticized Predmore's efforts before the court to characterize her tax evasion charges as the result of co-signing returns with her husband. Predmore is facing six felony charges of willful tax evasion, partly because she hosted and attended the hotel seminars, which were run through a business she co-owned with her husband, they said.

"She knew how the tax shelter worked, and she knew that the IRS published guidance on abusive trusts," prosecutors said. "This is not a case in which one spouse manipulated the other. Nor is this a case in which one spouse kept the other in the dark."

Predmore and her husband created four trusts and paid personal expenses from bank accounts they opened for each trust, according to their indictment. They also transferred multiple real estate properties into one of the trusts before selling, according to the charges.

Predmore, calling herself "a nonviolent grandmother, wife, mother and business person," asked the court on January 17, 2023, to remove the ankle monitor, saying that it was unnecessary and that she had "suffered significant problems" with it.

The device broke twice, once when she was putting on her shoes and another time while she was sleeping, she said. Both times she notified the authorities and drove more than an hour to Denver from her home in Estes Park, Colorado, to get a new one.

The government's fear that she would flee the country is "mere speculation and conjecture," she said. She can't travel to Dubai without her passport, which she has already surrendered. And the fact that she had permission to work in the country, where she intended to sell life insurance, doesn't suggest that "she would uproot herself from their chosen home community, family, friends, church and neighbors to live on the other side of the planet," she said.

Prosecutors said that her stories about the damage to the ankle monitor didn't add up, even though a failure analysis performed by the manufacturer showed no visible evidence of tampering. That same analysis observed a broken strap attachment and missing pins, prosecutors said.

Photographs of the broken devices are inconsistent with her explanations and conflict with what she told the court, they said. Predmore initially told authorities that the ankle bracelet fell apart and fell off her leg when she tried to charge the device. Furthermore, when probation authorities asked Predmore why the device had broken a second time, she said perhaps lotion applied to the area could have broken it.

"It seems highly unlikely that this damage occurred either when she placed the device on the charger, while she was putting on her shoes, after applying lotion to the area of the device, or during her sleep," prosecutors told the court.

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Read more at: Tax Times blog

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