A federal jury in the District of Colorado has convicted four individuals for running a widespread “layered” trust tax evasion scheme that resulted in roughly $40 million in losses to the United States government.
Marcia Predmore, Roderick Prescott, Suzanne Thompson, and Weldon Wulstein were found guilty of conspiracy to defraud the United States. According to court documents and trial evidence, the group marketed an illegal tax shelter to hundreds of wealthy business owners across the country.
The setup, which cost clients between $25,000 and $50,000 to implement, utilized a web of four distinct trusts—a business trust, family trust, charitable trust, and private family foundation—to help clients avoid paying federal income taxes on up to 98% of their business profits. They achieved this by claiming deductions for personal living expenses and routing money through fraudulent charitable donations, often pitching the strategy at national seminars under the slogan “own nothing, control everything.”
The individual roles in the operation varied. Wulstein, a certified public accountant, prepared hundreds of false tax returns for the clients. He worked alongside Thompson, who ran a bookkeeping firm that generated financial statements for the trusts. Both Thompson and Wulstein were also convicted of six counts each of assisting in the preparation of false tax returns.
Prescott, who had a prior tax evasion conviction and was under a permanent injunction blocking him from promoting abusive tax shelters, managed the final layer of the scheme involving the private family foundation. Investigators proved he taught clients how to claim deductions for foundation donations while keeping complete personal control over the money.
Predmore, a registered life insurance agent, promoted the scheme through a business she ran with her spouse, Timothy McPhee. McPhee was sentenced in December 2025 to 151 months in prison for his role in the tax evasion scheme and for operating a separate investment fraud called the ROI Cash Flow Fund. Predmore was additionally convicted of six counts of tax evasion for using the fraudulent tax shelter to hide her own personal income.
“The defendants orchestrated an abusive trust tax scheme designed to help clients evade their tax obligations through a web of sham trusts, false representations, and fraudulent transactions,” said Colin M. McDonald, Assistant Attorney General for the National Fraud Enforcement Division. “Tax fraud schemes undermine the integrity of our tax system and deprive the government of resources, shifting the burden to honest Americans who follow the law. Today’s trial convictions underscore the Fraud Division’s commitment to holding accountable those who promote and profit from abusive tax shelters and other fraud schemes.”
IRS Criminal Investigation led the inquiry into the operation, noting that the defendants were repeatedly flagged by financial and legal experts before their arrests.
“These defendants were repeatedly warned by attorneys, CPAs, financial professionals, and IRS guidance that this trust-based scheme was illegal, yet they chose to ignore those warnings. Their conspiracy was a deliberate attempt to conceal income and undermine the integrity of our nation’s tax system while lining their own pockets through their lies,” said Amanda Prestegard, Special Agent in Charge of the IRS-CI Denver Field Office. “We appreciate the jury’s verdict and the message it sends to those who promote or engage in abusive tax schemes. IRS-CI will continue to partner with DOJ-Tax to pursue these criminal tax evaders.”
All four individuals face a maximum penalty of five years in prison for the conspiracy charge. Thompson and Wulstein face up to an additional three years in prison for each count of assisting with false tax returns, while Predmore faces up to five additional years for each count of tax evasion. A federal district court judge will determine the final sentences at a later date. The case is being prosecuted by Trial Attorneys Lauren K. Pope and Patrick Burns of the Justice Department’s Tax Section.
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