by Indianapolis, IN — A Certified Public Accountant (CPA) based in Indianapolis has been sentenced to three years in federal prison after pleading guilty to filing false tax returns and participating in a multimillion-dollar illegal tax shelter scheme.
According to the U.S. Department of Justice, Jason Crace admitted to helping clients — primarily based in Mississippi and other locations — claim fraudulent business deductions disguised as “royalty payments.” The tax fraud occurred over nearly a decade, between 2013 and 2022.
“These ‘royalty payments’ were merely circular flows of money designed to give the appearance of genuine business expenses,” the DOJ stated in a press release.
The scheme involved clients transferring funds to bank accounts controlled by tax shelter participants. These funds were then funneled back to the clients through separate accounts, allowing them to retain access to their money while falsely deducting the transactions as business expenses.
Federal investigators found that the fraudulent deductions cost the Internal Revenue Service (IRS) at least $2,532,936 in lost tax revenue.
Crace was sentenced on Monday in federal court and will serve three years in prison for his role in the tax fraud. The case highlights ongoing efforts by federal authorities to crack down on financial professionals who abuse the tax system.
The DOJ has not disclosed whether any additional charges or arrests related to the tax shelter network are forthcoming.
