The First Scheme To Hide Assets
Prosecutors in U.S.A. v. Lockwood, allege Alaska dentist Glenn Lockwood hid assets twice from the IRS. During Mr. Lockwood’s first scheme, Mr. Lockwood supposedly hid $575,000 in federal income taxes for years 2000-2003. Mr. Lockwood is thought to have hidden the $575,000 through these common concealment tools:
- nominees (intermediaries);
- sham trusts
- shell companies
- multiple jurisdictions such as Ireland, the Cayman Islands & the Bahamas—where Mr. Lockwood reportedly used sham trusts & / or shell companies.
As a consequence of his first scheme, Mr. Lockwood was convicted of tax evasion in violation of 26 U.S.C. § 7201. He was sentenced to 60 months in prison followed by 3 years of supervised release.
The Second Suspected Scheme
Mr. Lockwood’s second scheme to hide assets allegedly spans from 2013 to the present. It supposedly involves Mr. Lockwood’s effort to evade more than $3.5 million in taxes. Within weeks of Mr. Lockwood’s release from imprisonment for his first scheme, Mr. Lockwood allegedly started his second scheme to hide assets. First, Mr. Lockwood is thought to have used LegalZoom to form a shell company in Wyoming called Strategic Innovations LLC. Next, Mr. Lockwood allegedly hid a bank account and other assets by titling them in the name of Strategic Innovations LLC. When bank accounts are hidden this way they are referred to as “nominee bank accounts”.
As part of his alleged second scheme, Mr. Lockwood also reportedly engaged in structuring. Structuring occurs when a bank customer structures cash deposits or cash withdraws so they are less than the $10,000 threshold for the bank to create a Currency Transaction Report. Prosecutors say over a five-week period, Mr. Lockwood and his wife deposited $164,000 into the Strategic Innovations LLC. Then, Mr. Lockwood and his wife are thought to have “structured nearly all of the money out of the Strategic Innovations account [emphasis added]”. Prosecutor’s May 2, 2022 Motion for Detention Hearing, at p.18.
Additionally, Mr. Lockwood and his wife are suspected of filing for bankruptcy and then concealing assets belonging to their bankruptcy estate. As a result of the alleged second scheme, Prosecutors have charged Mr. Lockwood and his wife with: tax evasion, conspiring to defraud the United States, bankruptcy fraud, wire fraud, money laundering and other federal crimes. To learn more about Mr. & Mrs. Lockwood’s suspected crimes, read their April 20, 2022 indictment available here.