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9 UNITED STATES0FAMERICA,

10

Plaintiff,

1l

vs.

12 W ILLIAM S.REED ,
RICHARD C.NEISW ONGER,and
l3 W ENDELL L.W AITE,

14

Defendants.

15

)
)
)
)
)
)
)
)
)
)

CRIM INAL m DICTM ENT

'

2:ll-cr- ..'
l
VIOLATIONS:

18U.S.C.j371-ConspiracytoDefraudthe
UnitedStates
18U.S.C.j 1341-M ailFraud
18U.S.C.j 1343-W ireFraud

16

18U.S.C.371-ConspiracytoCommitM ail
Fraud and W ire Fraud

17

26 U.S.C.j 7201 - Attemptto Evade or

l8

D efeatTax

19

l8 U.S.C.j l956(h) - M oney Laundering

Conspiracy

20

'

18U.S.C.jl028A(a)(1)-Aggravatedldentity

21

Theft

23 . . .

24

...

25

...

26

...

1
.

U N IT E D ST A T E S D IST R IC T C O U R T
D ISTR IC T O F N E V A D A

22

FrI:'))
j.rkTyj
yjj
;

!- ----

p
i

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 1 of 30

'

1
2
3

N EISW ON G ER

18U.S.C.j37l-ConspiracytoDefTaudthe

U nited States

'

9-14

18 U .S.C.j 1343-W ireFraud

15

18 U .S.C.j371-ConspiracytoCommit
M ailFraud and W ire Fraud

30

18U.S.C.j1956(h)-MoneyLaundering
conspiracy

W ILLIAM S.REED

18U.S.C.j37l-Conspiracyto Defraudthe

10

U nited States

l1

2-8

18U.S.C.j1341-M ailFraud

12

9-14

18U.S.C.5 1343-W ireFraud

13

15

18U.S.C.j371-ConspiracytoCornmit
M ailFraud and W ire Fraud

14

16-29

26U.S.C.j7201-AttempttoEvadeor

15

D efeatTax

16

30

18U.S.C.j 1956(h)-M oneyLaundering

C onspiracy

17

l9

l
p

20

RICHARD C.

CharRe

18 U .S.C.j 1341-M ailFraud

D efendant

2-8

l8

Sum m ary ofC harges

Counts

I
I

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 2 of 30

31-32
W ENDELLL W AITE
.

18U.S.C.j1028A(a)(1)-Aggravated

u entity Theft

18U.S.C.j371-ConspiracytoDefraudthe
United States

21 TH E G RAN D JU RY CHA R GES TH A T:

22

INTR OD U CTION

23

mj-jjeparties

24

(1) Attimesrelevantto thisindictment,defendantRICHARD C.NEISW ONGER was

25 engaged in salesand m arketing venturesand resided in LasV egms,N evada, O n or aboutN ovem ber

26 l3,1996,theFederalTradeCommission(''FTC'
')filedacomplaintagainstdefendantltlcllAlo C.

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 3 of 30

1 NEISW ONGER,charginghim with promoting,m arketing,and selling abusinessopportunitywith

2 falseandmisleadingincomeclaimsamongotherdeceptivepractices,inviolationofsection5(a)of
3 the FTC Act. Specifically,the FTC alleged thatdefendantRICHARD C.NEISW ONGER was

4 deceptivelym arketingbusinesstrainingprograms,atacostofapproxim ately$10,000 percustomer,

5 and m isrepresenting the earning potentialand other aspects ofthe program to consumers. On or

6 beforeFebruary28,1997,defendantRICHARD C.NEISW ONGER stipulatedwith theFTC tothe

7 entryofacourtordered Permanentlnjunctionprohibitinghim from such salesinthefuture.

8

(2)Attimesrelevanttothisindictment,defendan!W ILLIAM S.REED ownedatleastone

9 residence in Las Vegas, N evada. DefendantW ILLIAM S. RE ED w asadm itted to practice law in

10

the State of Colorado from approximately 1975 until on or aboutAugust4, 1997. Defendant

l1 W ILLIAM S.REED istheauthorofthebooksBulleproofAssetProtecton.

12

(3) Attimesrelevantto thisindictment,defendantW ENDELL L.W AITE residedinLas

13 Vegas,Nevada. DefendantW ENDELL L.W AITE wasa licensed Certitied Public Accountant

14 (''CPA'')inNevada,CaliforniaarldUtah.DefendantW ENDELL L.W AITE wasfirstlicensedby

15 theN evada State Board ofA ccountancy on oraboutSeptem ber24,1976.
16

n e Entities

17

(4)From atleastNovember4,1998,andcontinuingthroughatleastJuly17,2006,defendant

l8 RICHARD C.NEISW ONGER owned,operated,controlled and directed a business entem rise

19 initially identified asAPO M arketing,purportedlya soleproprietorship,and lateridentified asAPG
20 M arketing,Inc.,aswellasothername variatlts,collectively referred to herein ms''APGM ''.

21

(5) On or aboutJanuary 31,2002,APGM ,controlled by defendantRICHARD C.

22 NEISW ONGER,wasincorporated in thestateofNevada.TheNevadaSecretaryofStateassigned

23 APGM entitynum berC2635-2002;defendantW ltzlulAM S.REED w asnam edPresident,Secretar,y

24 and Treasurer;and,APG,Inc.,wasnamedastheRegfstered Agent.On oraboutFebruary 1,2010,

25 the active status ofthis entity w asperm anently revoked.
26

,..

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 4 of 30

(6) OnoraboutApril5,2005,defendantRICHARD C.NEISW ONGER causedAPGM to

be reincorporated in the state ofNevada. The N evada Secretmy ofState assigned APGM entity

numberE0188842O05-4;defend/ tW CHAM C.NEISW ONGERwaSnamedpresident,Secretac ,

Treasurerandoirector;and,Ai'e,Inc.,wasnmnedtheRegisteredAgent.Asorvay1,2008,the
active status ofthisentity w as revoked.

(7)Attimesrelevanttothisindictment,defendantltlcllxklm C.NElsW oNGER contzolled

atleastone APOM entity actively engaged in the sales and marketing of an assetand income
concealm entschem e,controlled atleastone bank accountused to execute operationsand receive
proceedson behalfofAPGM and,asanam ed officer,engaged in atleastonebusinessenterpriseas
APGM inpartnershipwith defendantW ILLIAM S.REED anddefendantW ENDELL L.W AITE.

(8) From atleastOctober23,l998,andcontinuingthrougbatleastJuly 17s2006,defendant

W ILLIAM S.REED owned, operated,controlled and directed a business enterprise initially
identified asAssetProtection Group,Inc.,and lateridentified asAPG,Inc.,aswellasothername
variants,collectively referred to herein as ''A PGI''.

(9)OnoraboutOctobei23,1998,defendantW ILLIAM S.REED causedAPGItobecome

incorporated in the state ofNevada. n eN evada Secretary ofState assigned APGIentity number
(224889-98)defendantAVILLIAM S.REED was nmned ms Prsident,Secretm'y and Treasurer;
defendantW ILLIAM S.REED and defendantRICHARD C.NEISW O NGER wereboth nam ed
as Directors;and ''LegalForm s +''wasnam ed asthe Registered A gent.

(10) On oraboutNovember l2,1999,defendantRICHARD C.NEISW ONGER was

rem oved from A PG I'S A mm alListofOfficers tiled w ith the N evada Secretary ofState. D efendant
W ILLIA M S.REE D rem ained the sole nam ed Director ofA PG Ithrough the tinalfiling ofA PG I'S
A nnualListofOfficers.

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 5 of 30

(11) OnoraboutApril10,2002,defendantW ILLIAM S.REED tiledachangecertificate

2 w ithN evada Secretary ofStateto changeA P(JI'SResidentA gentfrom ''LegalForm s+''to A PG ,Inc.
3 A sofN ovem ber 1,2008,the active statusofthis entity wasrevoked,

(12)Attimesrelevanttothisindictment,defendantW ILLIAM S.REED controlledatleast

5 one A PG I entity actively engaged in im plem enting an asset and incom e concealm ent schem e,
6 controlled at leastone bank accountused to execute operations and receive proceeds on behalf of
7 A PG Iand,asanam ed ofticer,engaged in atleastonebusinessentem rise asA PGIin partnership with

8 defendantRICHARD C.NEISW ONG ER and defendantW ENDELL L.W AITE.

(13)Attimesrelevanttothisindictment,defendantW ENDELL L.W AITE wasaNevada

10

licensed CPA . From at lemst O ctober 23, 1998, and continuing through at least July 17, 2006,

l1 defendantW E ND ELL L.W AITE ow ned,operated,controlled and directed atleastonetax services

12

businessentity,

13

(14) From on oraboutDecember11,2001,defendantRICHARD C.NEISW ONGER and

14

defendantW ILLIAM S.REED engaged defendantW ENDELL L.W AITE to provideassetand

15 incomeconcealmentschemedevelopm entand endorsementaswellastax servicesforAPGI.0n or

16 aboutDecem ber28,2001,defendantW ENDELL L.W AITE incorporated a new businessentity,
17 W aite & A ssociates,Inc., in the state of N evada. On or about June 26, 2002, a press release
18 announced a ''strategic alliance''betw een A ssetProtection Group and W aite & A sseciates,in which
19 the newly form ed W aite & A ssociates w as described as ''founded locally 25 years ago by CPA
20

W endellW aite'
'.

21

(15) Attimesrelevanttothisindictment,defendantW ENDELL L.W AITE controlledat

22

leastone entity actively engaged in delivering assetand incom e concealm entschem e developm ent,

23

including m arketing,testim onials,trainings and tax services forAPGM and/or APG I;controlled at

24

lemstone bank accountused to execute services in supportofand to receive revenue derived from

25 A PGM and/orA PGI;and,asa nam ed ofticer,engaged in atleastone businessengagem entw ith

26

, ..

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 6 of 30

@

1.

1 APGM and APGIin partnership with defendantRICH ARD C.NEISW ONGER and defendant
2 W ILLIA M S.R EED .

(16) Despite the attemptcd appearance ofseparation conveyed by the use ofnumerous

4 businessnamesandentities,thedefendantsRICH ARD C.NEISW ONGER,W ILLIAM S.REED

5 and W ENDELL L.W AITE combinedtheirefforts,skills,funds,professionalknowledgeand other
6

personally held resources. ''A ssetProtection G roup'

'wastheprom otionalnam ein use by defendants

7 RIC H A R D C . N EISW O N G ER ,W IL LIA M S.R EED and W EN D ELL L. W A ITE to offer,

8 endorse,m mket,and profitfrom the sale ofan interw oven fabric offraudulentproductsdesigned to
9 defraud the governm entand otherbona tide creditors. n ese fraudulentproductsw ere also sold to

10

and by ''consultants''who purchased the ''business opportunity''to sell this asset and incom e

1l concealm entschem e.

12

(17) The combined pursuitofprofitfrom the assetand income concealmentscheme by

13

defendants,RICH AR D C .N EISW O N G ER ,W ILL IA M S.R EE D and W END ELL L.W A ITE ,

14

wasm ostfrequently referred to as''APG''.

15

The Schem e to Defraud

16

(18)From onoraboutOctober23,1998,andcontinuingthroughatlemstJuly17,2006,APG

17 offered,endorsed,marketed,and protited from aschem eto defraud which includedthesaleofthree

18 interrelated products,including: a)disguised corporate ownership serviceswith associated barzk

19 accounts;b)fraudulentso-called ''friendlyliens''ofencumbrancegeneratedwithoutconsideration;

20 and c)consultant''businessopportunities'ltosellthesefraudulentproductsonbehalfofAPG tothe

21 public.

22

(19)The APG scheme relied upon defendantW ILLIAM S.REED'S intepretation of

23 elements ofNevada com orate law , including the use of bearershares as outlined in his book,

@
i

24 BulletproofAssetprotection.ApGfonnedovertwothousand(z,ooolhlevadacorporationsforclients
25 usingdefendantW ILLIAM S.REED asthecorporateoflicerantl/ordirector.APG falselyinformed

!
I
I

26

'

...

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 7 of 30

customersthatthelmnamed ownersofeach ccrporation couldtruthftlllydenytheirownership ofthe

corporation.

(20) APG promoted the falsehood thatone could own and controla corporation and its
assigned assets withoutthatownership and controleverhaving to be acknowledged,and thatene
could hidetheownership and controlofassetsfrom creditors.ThreeAPG versionsofincom oration

wereofferedtoAPG customers:a)theso-calledAssetprotectionCorporation,''usedtoconcealasset
ownership;b)these-calledtt-f'
axSavingsNevadaCczporatitm,''designedto''shiftincome''toNevada
toevadet,
axation;andc)theso-calledIntemationalBusinessComoration(''IBC''),designedtomove
''liquidassets''(cash)offshereanenymouslythroughtheuseofanAPG escrow acceunt.
(21)Aspartofitsscheme,APG openedcozporatebankaccountsusingthenazneoftheclients'
corporations.APG generatedrevenuefrom eachnew incorporation,eachcorporaterenewal,andeach
escrow accounttransaction,

'(22) APG providedclientsfraudulentlienandlien releasepreparationservicesbycreating

''friendly''encum brance docum ents on clientassets in the form oftn lstdeedsornotesto be held by

clientAPO corporations. The clientswould formally record the liensattheirappropriate county

recorder'soffice,Thefalseappearance.ofan encumbranceand equitytransfer,knownasaso-called
''friendly lien,''was a fraudulent conveyance'of an interest in property to a nom inee for no

consideration.Theobjectiveofaso-called''fliendly lien''wastodefraudcreditorsbycreatingthe
false im pression thatlittle or no equity w asavailable in a respective client'sproperty. C reating this
false im pression allow ed A PG clients to protect equity in their assets by discouraging bona fide
creditors,including the governm ent,from executing liens on assets thatw ould appear to be overencum bered.

(23)APG alsoprovidedlienreleasestoclientsallowingthem toeliminatethefraudulentliens

and to un-encum bertheasset.A PG provided these lien releaseseithersubsequentto orsim ultaneous
w ith the sale ofthe fraudulentliens.

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 8 of 30

(24) APG generated revenuefrom each saleofafraudulentlienand from each saleofan

associated lien release.

(25) APG promoted and soldan ''%setprotection''businessopportunitypackageknownas

''
the A PG Program ''nationw ide and prom ised ptlrchasers ''unlim ited eam ing potential.''lndividuals

who purchased the APG Program ,typically ata price of $9,800,became APO ''consultants''and
receivedtraining inthemarketing,saleand useoftheAPG schem efrom defendantsRICHARD C.
NEISW ONGER,W ILLIAM S.REED M dW ENDELL L.W AITE.TIZeAPG consultants,inturn,
soldtheA PG assetand incom e concealm entschem eto custom ers,referredto as''clients''w ho desired
to distancethem selvesf'
rom theirliabilitiesand to concealtheirassetsfrom currentasw ellaspotential
litigants,creditors,govermnentagencies,and the couds. A PG consultantsreceived a portion ofthe
proceeds from theirsale ofthe APG assetand incom e concealm entschem e.

(26)APG generatedrevenuefrom everysaleoftheAPG businessopportunityprogram toan

individualand each such sale created a new consultantforA PG w ho w ould in turn prom ote APG
productsand senzices.

(27) From Octobey23,1998,through and including atleastJuly 17,2006,defendants

Y CHAM C.NEISW ONGER,m LLIAM S.M ED R dW ENDELL L.W AITE,CaUSedatleast
the follow ingvolttm eofassetandincom econcealm entactivityto occurw hiledoingbusinessasAPG :

(a)

From onorabouttheincorporation dateOctober23,1998,andcontinuingat

leastthrough the receiver'ssuspension ofA PG corporate servicesbusinesseffective Janua!y 4,2007,

APG sold theA PG businessopportunity program to atleast1,000 consultantswho becam eprom oters
ofthe A PG concealm entschem e nationw ide. The purchase price perconsultantvaried. The m ost

frequently occuning price point was $9,800.The receiver reported to the FTC,estimated gross
receipts from sales ofthe A PG business opportunity program to consultants,in excess ofnineteen

million($19M)dollarsduringthisperiod.ThisIiguredoesnotincludeproductsalesgeneratedbythe
oonsultants.

i
E

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 9 of 30

l
2

(b)

From tm oraboutOctober23,1998,andcontinuingatleastthroughJanuaz.
y

4,2007,W ILLIAM S.REED,through APG,tiledastheofticer,directororresidentagentforatIeast

3 2,559disguised ownershipcorporationswiththeN evadaSecretaryofState.Domesticincorporation

4 pricescharged by APG to consultantswereatleast$795 pernew corporation.

(c)

From March20,2002,throughM ay22,2006,W ILLIAM S.REED,through

6 APG,causedtobeopenedatleastninehundred(900)disguisedownershipcorporatebankaccounts
.

7 with Nevada FirstBank on behalfofAPG clients,thusenabling clientsto mask ownership oftheir

8 ftmdswhilestillretaining controland useofthismoney.DefendantW ILLIAM S.REED wasthe

9 solesignatoryonatleastsixhundrednineteen (619)oftheseaccounts.
10

(d)

Between M arch 1,2003,andJune30,2006,APO received oversixty-three

ll million ($63M ) dollars in deposits and perfonned over sixty-two million ($62M ) dollars in
12

withdrawalsthrough one ofthe bank accountsdesignated by APG during thistim e asan ''escrow''

13

accotmt. This escrow accountwasused by A PG forthe disguised m ovem entofclientfunds.

14

'

(e)

BetweenAugust1,2003,and June30,2006,APG sentoverelevenmillion

l5 ($1lMldollarsoffshoretoIscnomineesr oughoneorieb- accountsdesignatedbyApG during

l6 thistimeasan ''escrow''account.Thisescrow accountwasusedbyAPG forthedisguisedm ovement

l7 ofclientftznds offshore to hide liquid assetsfrom creditors.

l8

(9

From onoraboutOctober23,1998,andcontinuingatleasttlurughJanuary

19 4,2007,APG preparedatleastfotlrhundredtwentpsix(426)fraudulentencumbrancesintheform
20 of so-called ''friendly liens''to be tiled by clients. The dcklla.
r am ount of these fraudulent

21 encumbrancesexceededonehundredlifty-two million ($l52M )dollarsandrangedfrom $7,000to

22 threemillion ($3M )dollarsperlien, None ofthese liensrepresented a valid transaction. Their
23

purposew 4sto createthe appearance ofreduced equity availableto bona fide creditors,including the

24

federalgovernm entand the IRS.

25

...

26

...

I
1

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 10 of 30

(g)

From JanuarythroughDecember2004,atleastninetpthreeclient''corporate''

2 tax referralsweremadebyAPG tothetax servicepracticeofdefendantW ENDELL L.W AITE.A

3 $300 referralpaymentwas m ade by APG to defendantW ENDELL L.W AITE foreach ofthe
4

referrals during this tim e.

(28) On oraboutJuly 17,2006,theFTC broughtacivilcontemptactionagainstdefendant

6 RIC

C.NEISW ONGER,defendantW lti lAM S.REED,andtheAPG enterprise.'IN FTC

7 allegedthatdefendantltlc H A u C .N E ISW O N G ER M d defendantW llzlulA M S.R EED violated

8 defendantRICHARD C.NEISW ONGER'S1997PermanentInjunctionbypromoting,marketing,

9

and selling the APG business opportunity scheme through m isrepresentations and om issions of

10 m aterialfacts.

l1

(29)Following theJuly 17,2006,FTC interventionintotheAPG operations,thefollowing

12 events occurred in the lives ofdefendants RIC H A RD C .N EISW O N G ER ,W ILLIA M S.R EED
13 and W END ELL L .W AITE :

14

(a)

OnoraboutSeptember28,2010,defendantW ILLIAM S.REED stipulated

15 intheUnitedStatesTM Courttopersonalincometaxliabilitydeficiencies(understatement)inexcess
16 ofthirteenmilliondollars($13M )forhis2001throughhis2006personalincometixreturnsastiled.

17

(b)

0n oraboutMarch 27,2008,theFTC appointed receiver,estimated APG

18 proceeds received by defendantRICHARD C.NEISW O NGER,afterreinvestmentin ongoing

19 operations,tohaveexceededthreemillion ($3M )dollars.

20

(o)

Whenquestioned in2008,defendantW ENDELL L.W AITE self-reported

21 thathereceived 1#3APG corporatetax serviceclientreferrals.DefendantW ENDELL la.W AITE

22 caused the preparation ofover400 tax rem rns forthese clientsfortax years 2002 tltrough 2006.

23
24

(d)

Onatleastfourseparatedatesoftiling,namelyAugust29,2007,
.December

12,2007;April8,2008;and M ay 8,2008,theUnited Statesmoved to forecloseoutstanding federal

25 tax liensonthedisguisedcorporatebankaccountsofoverseventy(70)APG clientsheldatBarikof

26 . . .

10

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 11 of 30

Nevada.ThecombinedfederaltaxliabilitiesfortheseAPC;clientsexceededfourteenmillion($14M )
dollarsfortax years 1988 tluoug.
h 2006.
C O UN T O N E
Conspiracy

(18U.S.C.j371)

(30) Paragraphs cme through twentpnine are re-alleged and incorporated herein by
reference.

(31) From on oraboutOctober23,199:,theexactdatebeingunknewn to theGrand Jury,

andcontinuingthereafteruptoandincludingnoearlierthanJanuary4,2007,intheDistrictofNevada
and elsewhere,

w ILLIA M s REE D

Itlclu % c NEISW ONGiR,and

wENIW LL.wAITE,
defendants herein,did unlawfully,vollm tarily,intentionally and knowingly conspire,combine,

confederate,arld agree togetherand with each otherand with other individuals both known and
unknown to theGrand Jury todefraudtheUnited Statesbydeceit,craR,trickeryanddishonestm eans
forthepurposeofim ped.ing,im pairing,obstructing,and defeatingthelawfulgovenunentfunctions

of the InternalRevenue Service of the Tremsury Departm ent in the ascertainment,computation,

assessment,and ccllectionofrevenue,to wit;federaltax liabilities.
M annerand M eans

(32) AmongthemannerandmeansbywhichdefendantsW ILLIAM S.REED:RICHARD

C.NEISW ONGER,and W ENDELL L.W AITE,and their co-conspirators carried outthe
conspiracy were the following;

(a) The defendants devised, marketed, promoted, directed, controlled ancl/or

im plem ented a fraudulentschem e thatwas focused on the sale and promotion of
multiple assetand income concealmentinstrum ents,to include;so-called -ttAsset

ProtectionCorporations,''lnternationalBusinessComorations('IBCs''),ItTaXSavings
N evada Corpom tionss''dfsguised corporate ownership bank accounts and so-called

11

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 12 of 30

''friendly liens.'' A1lofthese products were promoted and/orsold by defendants

Y CHAM C.NEISW ONGER,W ILLIAM S.M ED aM W ENDELLL.W AITE
asa w ay for individualsto create anonlqnity,disengage them selves from assetsthey

continued to control,and to defraud creditors,including the govem ment and the

InternalRevenueService(''lRS'').
The lncorporation Devices

(b)

Through the use of various means,including the use of mailand wire

com m unicationsto clients,A PG established corporationsforclientsfora fee,

(o)

The corporations established by APG fortheirclients were separate and

distinct: the so-called tA sset Protection Corporation''w as used to conceal asset

ownership from creditors'

,the so-called 't-f'ax Savings N evada Cop oration''was
designed to ''shillincom e''toNevadasothatclientscouldevadetaxation;andtheso-

called InternationalBusiness Corporation ('IBC'')was designed to move ''liquid

assets''(cash)offshoreanonymouslythroughtheuseofanAPG escrow account,

(d)

For those purohasing so-called is-f'

ax Savings Nevada Corporationss''

promotionalm aterialsindicated thatthefeeforthisproductincludeda free,two hour

consultationw ith defendantW END El-zlaL .W A ITE'Stirm ,W aite& A ssociates,Inc.

Records indicate that for a period oftim e,APG paid defendant W ENDELL L.

W AITE $300 fereach sc-called tGf'

ax SavingsNevadaColporation''client.

(e)

Onceacorporation wasformedandsoldtoaclient,APG,attherequestor

direction oftheclient,applied fora nominee corporate bank accountforthe client's

corporation. '
I'he majority ofthese accotmtswould listdefendatltW ILLIAM S.
RE ED msthe sole authorized signatory on the account, Anyone else w ho w anted to

be an additionalsignoron the accountneeded to provideAPG with acopy oftheir

identification and socialsecurity number. Booksofcheckscontaining defendant

12

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 13 of 30

'
W ILLIAM S.REED'Sfacsimilesignaturewouldbesenttotheclientfortheirusein
accessing any fundsin theirdisguised ow nership corporate bank account.

(9

APG operatedan''escrow''accotmtintowhichclientscouldwiretheirmoney,

and according to the client'sinstructions,APG would then wirethatmoney into the

client'sdisguised ownership com oratebank accountoroffshore.In connection with
this''Escrow Accounts''defendantW ILLIAM S.REED stated:''W erecommendour
clientsusean escrow accotmtto depositfunds,eitheroursortheirlawyers',and then
thefundsaretransferred by usortheirlaw yerto aN evadaoroffshoreaccount.There
isno link betw een the clientand any corporate account.'' He w enton to say that,''this

allows ourclientto arlswer honestly and truthftzlly,under oath,thathe has never

moved money in or out of the country.'' APG charged fees for these

inccm ing/outgoing wires,including the gmater()f: a ,

$250 feeor .25% ofthe wire
dollaram otmtto execute the wire transfer.

The So-called ''Friendlv Lien''

(g)

n rough the use ofvmious means,to include the use ofmailand wire

com mlmicationsmade available by APG to clients,APG fora feecreated so-called

''friendly liens''fortheirclients.

(h)

APG created,sold,marketed and/orendorsed so-called ''friendly liens''to

clientsand consultants. The so-called ''friendly lien'

'wasusually comprised oftwo
documents:theDeedofTrustorM ortgage,andaPromissoryNote.Thesedocuments

detined the tictitious loan and repayment terms Letween the APG client and the
nom ineecorporation.Forthepreparation ofthesetw o dooum ents,A PG w ould charge
the client a fee. For an additionalcharge,A PG w ould prepare a Satisfaction of

M ortgage orDeed ofFullReconveyance thatacted asa lien releaseto beused when

the clientwanted to sellthe realestate orotherwise satisfy the ''friendly lien''and
unencum berthe property.

13

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 14 of 30

(i)

APG providedinstnzctionsregardinghow tocalculatetheso-called''friendly

lien''am ount-based on the equity in the property. These instructionsstated:''C lients

would simply subkactany loan/m ortgagesfrom theestim ated property value. This

wouldbethemnountofequityin (thelhome-theamotmtofthe'FriendlyLien'''.The
instructionsfurtherinformed the clientsthatthe so-called ''friendly lien''should be
filed atthe County Recorder's Oftice where the propcrty w aslocated.

()

W hetheritwasforpttrchasesofApGcomorationsorso-called''friendlyliens,''

APG used atictitiouslirm name,M ountain BusinessServices,to processclientcredit

card purchases. This procedure was m arketed to clients/consultants in the event
clients'creditcard statem entsw ereeversubpoenaed,no onew ould see thenam e Asset
Protection Group orA PG .
n e 'Business Opportlm ities'Procram

(k)

In orderto pemetuatethe saleofdisguised ownership corporationsand so-

called Iifriendly liens,''the defendants,W ILLIAM S.REED and RICHARD C.

NE ISW O N G ER ,put together a businessopportunity program w herein they would

selltoindividuals,o icilyforsg,8oo,theopportunitytopromoteAPG'Sproductsand
services. This program w as m arketed by defendants,W ILLIA M S.R EED and
R IC H A RD C .N EISW O N G ER ,w ith m isleading arld deceptive representations.

(l)

Through the use of various means,including the use of mailand wire

com m unications to clients, A PG created, m arketed and sold the A PG business

opportunity program .

(m) Aspartofhismarketingfunction,defendantRICHARD C-NEISW ONGER

placed,orcaused to be placed,advertisem ents forA pG in m agazinesand on radio and
television. Som e ofthese ads appeared orw ere scheduled to appearin m edia such as
U SA Today,TheRobb Report,BusinessW eek M agazine,The Rush Lim baugh Show ,
TheG lerm Beok Show ,Seanl-lannity,and otherradio and television program s.Parties

14

'
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Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 15 of 30

I
!
!

i
i
!
i
!
;
j

interested in beoom ing ApG consultantswouldtypically respondby telephoneto the

advertisementsandbegintheprocessofspeakingwithApG salesrepresentativesypaid

references,andevendefendantRICHARD C.NEISW ONGER himself.A1lsuch

I
1
I
@
1

conductwasdesignedtoconvincetheprospectiveconsultanttobuytheAPG business

OPPOIXUIAiW program .

(n)

infonuationalm essages from APG , the prospective consultants w ould be invited to

listen to and participate in defendant W ILLIAM S.REED'S weekly/bi-weekly

conrerence calls aswellas to receive promotiopalmaterials- including defendant

'

10

W ILL IA M S. R EED 'S book and defendant R ICH A RD C . N EISW ON G ER 'S

ll

prom otionallettersvia the m ail.

12

(o)

l3

credit card, specialfinancing, or other m eans. This fee allow ed the consultantto

14

access APG 'S prom otional m aterials,products, and services in order to sell these

15

productsto prospectiveclients.The consultantsw ouldalso haveaccessto livetraining

16

by defendants R ICH A RD C . N EISW O N G ER , W ILLIAM S. REED and

17

W EN D ELL L.W A ITE in LasV egas,N evada,orthey could receive thetraining via

18

audio CD'ssentto them viathem ail.

19

(p)

20

by new consultants via a paym entfrom defendantR ICH AR D C .N EISW O N G ER

21

often m ade payable to nom inee entities that defendant W ILLIA M S. REED

22

controlled. This paym entw ould also,attim es,be identified as ''training.''

23

(q)

24

butconsultantscould chargeasm uch astbeywantedfortheseproducts,Anyam ount

25

paid directly to A PG overthe w holesale am ount,less any applicable fees and service

26

requests,w ould be paid by A PG and sentby regular m ailpayable to the prim ary

'

InadditiontospeakingwithApGrepresentativesandlisteningtopre-recorded

Theprospectiveconsultantpaidafeeoftypically$9,800to APG viacheck,

DefendantW ILLIAM S.REED wouldobtainhisshareoftheproceedspaid

ApG setwholesaleandsuggestedretailpricesfortheirincorporationpackages,

15

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 16 of 30

consultant. Either the consultants orthe clients of the consultants could provide
paymentforthese selwicesvia check,creditcard,m oney order,orotherapproved
m ethodsofpaym ent.APO usedthefictitiousbusinessnameordba Western Business
Servicesforcreditcard sales.
*

DefendantW ENDELL L.W AITE validated APO productsfortax purposes

in avariet'
y ofways. DefendantW ENDELL L.W AITE spoke atAPG consultant
trainingsem inarsiheappearedinanApG promotionalvideofeaturingRobertW agner;
he appeared and w asreferred to in printed brochuresand prom otionalm aterials;and,

hespokewithAPG clients/consultantsbytelephone,answeringgeneraltaxquestions
for no charge, DefendantW ENDELL L.W AITE and APG formed a ''strategic
alliance''to marketso-called tCTA'
K Savings Nevada Cop orations''through APG'S
network ofconsultants. DefendantW EN DELL L.W AITE wmstheCPA specifically
selected to do business with APG. Defendants RICHARD C.NEISW O NGER,
W ILLIAM S-REED andW ENDELL L.W AITE,workedin concerttodefraudthe
United States,including theIRS.
The Prom otionalM aterials

(s)

At al1 times relevant to this conspiracy, defendants RICHARD C.

N EISW O N G ER ,W ILLIA M S.RE ED and W EN DE LL L.W A ITE , through the

use ofa book,brochures,training manuals,m arketing letters,mailings,and other

promotionalcom munications,intendedtoperpetrateafraudonanycreditorofanAPG
clientandto defraudtheUnited Statesgovernm ent.Thefollowingarestatem entsand
claim sm ade in APG m edia and literature:
''M ostcorporations form ed in Nevada are ewned and operated by theirow nerst)rby

ahandfulofpeople...theywantprotectionandprivacyfrom outsideIawsuits,lawyers,andtheIRS.''
@
inform ation.'

''
N evadaistheonly statewithoutareciprocalagreem entwiththeIRSto exchangetax

'

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 17 of 30

''Nevadansdon'tlikegovernmentasageneralrule,especiallywhenitcomestotaxes.''

''N evada isthe only state thatprovides al1the elem entsin itscorporate 1aw thatAsset

3 Protection G roup considersessentialz''

''n e useofBearerShares.Theseare likebearerbondsoreven likecash. W hoever

5 has possession ofthe Bearer Share ow nsthe com pany. A nd w hen the BearerSharesaze outofthe

6 client'spossession(perhapslockedupinhisparents'safedepositbox)hecantnzthftlllytestifythathe
7 doesnotown theNevada corpor
ation,''
!
8

''Don'twaituntilyoutrethedefendantin alawsuitorthetargetofanIRS investigation

9 to considerprotecting yotlrassets.''
10

''Betterto haveyourassetswherethe IRS can neverseizethem orknow aboutthem .''

11

''W hatajudgecan'
ttind,hecan'tseize.And,whenaskedaboutyourassets,youwant

12

to be able to say,tldon'thave any assets,'not tl've gotassets-butyou can'

tgetthem .'''

13

''In the eventyou areparty to afederallaw suitorin dispute w ith a federalgovenunent

14 agencysuchasthelRSorcustomsservice,youmaywantthemaximum assetprotectionaffordedby
15 an offshorecorporation4,

I
I

I6

''However,ifyou'vebeentargetedbytheIRS,orareroutinelyinvolvedinlitigation,

17 orhaveaccum ulated liquidassetsover$250,000,an offshorecorporation shouldbepartofyourasset

18 Protection plan.''

19
20

'

''OnceanassetisoutofreachofmyfriendthefederaljudgeandtheIRS,it'ssafe.And,'

evenmoreimportant,iftheyneverlearntheassetisoffshore,there'snoreasonforanyonetotalkabout

:!1 it.''
22

'A SSET PROTECTION tailored to the individualand fam ily uses a com bination of

23 tested,proven,legaltoolsto Sbulletproor assetsagainstsuch lawsuits,againstfam ily disputes,eveh

24

againstIR S atlacks.''

25

...

26

,..

17

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 18 of 30

''Butforthosewhodesireorneedthemaximum injudgment-proofassetprotection,
especially from aU ,S.Govemm entagency,werecomm end an offshore corporation calledan tIBC',
anlntem ationalBusinessCompany.ln addition to totalanonym ityand atax-free environment,this
offshore corporation providesyourclients with COM PLETB PROTECTION AOAINST ASSET
SEIZURE BY THE IRS orothergovermnentagencies.''
''Ifyou stop and think aboutit,there are m any reasonssom eone m ightwantthislevel
of asset protection. Som eone in or anticipating a dispute w ith the IRS to be resolved tlzrough
prolonged negotiation orextended installm entpaym ents.Som eonewho hasgoneyearswithoutliling

taxes.Someoneinorinvestedinabusinessregulatedbyandsubjecttofinesfrom theFTC,theFDA,
the SEC,orastateagency.Som eoneusing tax sheltersthatm ightbechallenged in thefutures''
.

''Usea Tax SavingsNevadaCorporation to: ...sidestep t% es...m oveyourpersonal

incom e to multiple Nevada Corporations owned by separate extended family members to take

advantage ofthe lowercorporatetax rateson thefirst$50,000 ofanycorporate incom e.''

''AssetProtection Group benefitsyou by offering productsand selwicesthatcan help

yousleepm oresoundly atnight,knowingyottrassetsareprotected from theriskofalawsuit,andcan

bringyouabetterlifestylebecauseyouwillhavemoretospendonyourfam ily,yourinterest,andyour
future...because you w on'thave to send itto U ncle Sam orto som e state tax authority.''
*

''W boShouldHaveaTM SavingsNevadaCom oration? Theobviousanswerisanyone

whosecombinedbusinessandpersonaltaxesarecuttingdeeply intoincom e.lfyoulookatthemoney

thatisgoingtothegovernmentandtink,11coulddosom uch morewiththatthantheywill,'youneed
a Tax SavingsN evada Com oration.''
.

''Block the lR S from levying yourw agesor seizing yourproperty.''

''
D ispose ofcash so it's positively tm tfaceable,yetim m ediately available.''

''17ofthemanysecretsyouwilllearn...//6)How tocreatea''friendlylien''toprotect

yourhomeorotherrealesotefrom any'courtjudgment,collection,lawyer,orgovernmentagency.''

18

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 19 of 30

O vertA cts

(33)lnfartheranceoftheconspiracyandtoeffecttheobjectsthereof,defendantsRICHARD
C.NEISW ONGER,W ILLIAM S.REED,arldW ENDELL L.W AITE andtheirco-conspirators
com mitted thefollowing overtacts,among others,in theDistrictofNevada and elsewhere:

(a)

Onoraboutoctoberz3,1998,defendantRICHARD C.NEISW ONGER anCI

defendant W ILLIAM S.REED acted together to inoom orate the entity,Asset

ProtectionCzroup,Inc.,andjoinedtogethertofonnthetirstboardofdirectorsofthe
A PG entity.

(b)

On oraboutNovember4,1998,defendantRICHARD C.NEISW ONGER

anddefendantW ILLIAM S.REED entered into awritten agreementto market,sell,

prom ote,train,implementand operatea1laspectsoftheAPG Program includingthe
saleofbusinessopportunitiesto individual''consultants''who soldAPG concealment
schemesto individual''clients.''

(c)

OnoraboutM ay 17,1999,APG soldaconsultantbusinessopportunitytoan

individualfor$2,500.

(d)

DuringthemonthofDecember1999,defendantW ILLIAM S.REED,acting

on behalfofAssetProtection GroupM arketing,paid the linalinstallm entforthetirst

shipment(3,000oopies)ofhisself-publishedbook,BulletproofAssetProtection.ln
thisbook,defendantW ILLIAM S.REED espoused hispurportedly ''bulletproop'
strategy ofusing disguised ownership com orations and false conveyances to hide
mssetsand incom efrom creditors,specifically the federalgovernm entand theIRS.

(e)

OnoraboutM arch7,2001,APG soldaconsultantbusinessopportunitytoan

individualfor$9,800.

(9

0noraboutDecember11,2001,defendantRICHARD C.NEISW ONGER,

on behalfofA PG ,signed and faxed a requestto an ongoing A PG vendor.This fmx

19

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 20 of 30

requested promotion of a ''new product endorsed and created by'' defendant

W EN D ELL L .W AITE :the so-called TTaX SavingsN evada Corporation,''

(g)

OnoraboutJkme 15,2002,APG soldaconsultantbusinessopporttmitytoan

individualfor$9,800.

(h)

OnoraboutJune26,2002,APG causedapressreleasetoappearatleasttwice

in the Las V egas m edia,alm ouncing a strategic alliance betw een A sset Protection

Group and W aite& Associates,lnc.n epressreleasenam ed defendantW ILLIAM

S.REE D and defendantW EN DELL L.W A IT E as principals,stating thatthe two
com panies had beglm m arketing so-called C'TKX Savings N evada Corporations''
through A PG 'Snetw ork ofm ore than 15O consultantsnationally.

(i)

On oraboutSeptember5,2002,APG formed orcausedto beformed aso-

called CtTa'K SavingsNevada Corporation''fora client,and paid $300 to defendant

W EN DE LL L.W M TE .

()

On oraboutSeptemberl0,2002,APG formed orcausedto befonned aso-

called <tA ssetProtection Com oration''fora client.

(k)

On oraboutSeptember17,2002,APG opened orcaused to be opened a

disguised ow nership com orate bank accountfor a client with an opening depositof

$100.

(1)

On oraboutM ay 5,2003,APO formed orcaused tobeformed an so-called

sA ssetProtection Com oration''for a client.

(m) On oraboutM ay21,2003,APG openedorcausedtobeopenedadisguised

ownership corporate bank accotmtforaclientwith an openingdepositof$250.

(n)

On oraboutJune2,2003,APG formed orcausedto be formed aso-called

KSTaX Savings Nevada Com oration'' for a client and paid $300 to defendant
W E ND ELL L.W A ITE.

20

I
i
1
I

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 21 of 30

(o)

OnoraboutAugust7,2003,APG soldaconsultantbusincssopportunitytoan

individualfor$9,800.

(.
p)

a client,with an encumbranceamotmtof$350,000.

(q)

client,with an encum branceamountof$1,985,000.

(r)

an individualfor$9,800.

(s)

10

EATKXSavingsN evadacom oration''foraclientanpaid$300t0defendantW ENlElwtz

11

L.W A ITE .

12

(t)

13

called iA ssetProtection Com oration''for aclient.

14

(u)

15

disguised ownership corporate bank accountfora clientwith an opening depositof

16

$250

17

(v)

18

f'AssetProtection Corporation''fora client.

19

(w) Onoraboutlanuary26,2005,APG openedorcausedtobeopenedadisguised

20

ownership com oratebank accountforaclientwith an opening depositof$250.

21

(x)

22

Ks-f'ax Savings N evada Com oration'' for a client and paid $300 to defendant

23

W EN D ELL L.W A IT E.

24

(y)

25

individualfor$9,800.

OnoraboutSeptember15,2003,APG created aso-called ''friendlylien''for

On oraboutJanuary26,2004,APG createdaso-called ''friendly lien''fora

On oraboutMarch25,2004,APG soldaconsultantbusinessopportunityto
0noraboutAugust30,2004,APG formedorcausedtobeformedaso-called

On oraboutSeptember27,2004,APG formed orcausedtobeformed asoOn oraboutSeptember30,2004,APG opened orcaused to be opened a

26

OnoraboutJarmm'y20,2005,APG formedorcausedtobeformedaso-called

OnoraboutFebrual'y7,2005,APO formedorcausedtobeformedaso-called

OnoraboutM ay24,2005,APG soldaconsultantbusinessopportunitytoan

.. .

21

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!

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 22 of 30

(z)

Onoraboutlune14,2005,APG createdaso-called''friendlylien''foraclient,

with an encum brance amotmtof$800,000.

(aa) On oraboutSeptember1,2005,APG formed aso-called sAssetProtection

Corporation''fora client.

(bb) On oraboutSeptember21,2005,APG opened orcaused to be opened a

disguised ownership corporatebank accountfora clientwith an opening depositof

$75,325.

(cc) OnoraboutAprill2,2006,APG createdaso-called''friendlylien''foraclient,

with an encumbranceam ountof$1,000,000.

10

(dd) On oraboutJuly 17,2006,twodaysbeforetheFTC appointedreceivertook

1l

controlof the APG business and its aftiliates and subsidiaries,A PG com m itted the

12

follow ing overt acts in the ongoing prom otion of the asset protection schem e as

l3

day-to-day business operations:

14

i.

APG receivedpaymentforplzrchasingtheAPO Program business

15

opportunity from atleastonenew consultant,to includeone paym entby check

16

intheam ountof$9,800received bym ail.Inresponse,APG sentan operation

17

m anualto the consultantby m ail.

18

ii.

19

newlyformedassetprotectioncorporationsbymail(FedEx).

20

iii.

21

new corporations w ith the N evada Secretary ofState.

22

iv.

23

N evadasecretmy ofStateforatleasttivenew com orations;these slingslisted

24

defendantW ILLIA M S.R EED asthe only officerofal1five corporations,

25

...

26

...

APG sent corporate m inute books to at leastthree clients for three

A PG tiled orcausedto befiled A rticlesofInoorporation foratleasttw o

A PG liled or caused to be tiled an Initial List of Ofticers w ith the

22

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 23 of 30

1
!

v.

A PG liled orcausedtobetiled anlnitialListofO fficersforatlrastone

new so-called SCTKX SavingsN evada Corporation''w ith the N evada Secretazy

ofState.

vi.

inoludeonepaymentbycreditcardin theam ountof$818 and onepaym entby

check in the am ountof$1,295.

vii.

in theam ountof$1,992.

viii. APG applied foratleastfourdisguised ownership bank accountsat

10

Nevada First Bank for at least four clients using disguised ow nership

11

corporations.

12

ix.

13

account used for the transfer of client funds to disguised ow nership

14

corporations,including oneinternationalwirein theamountof$4,595.50.

15

x.

16

defendant RIC H A RD C .N E ISW O N G ER to m ake or cause to be m ade a

17

paym enton hisA m erican Expresscreditcard accotm t,disguising incom e and

18

the soume offundsused forpaym ent.

19

A 11in violation ofTitle 18,United StgtesCode,Section 371.

APG received paym ent forrenew als of at leasttw o corporations,to

APG receivedpaym entfortheform ationofanew corporationbycheck

A PG received at least one electronic deposit into the A PG escrow

DefendantW ILLIA M S.R EED used A PG proceeds received from

20

21

CO UN TS TW O TH R O U G H EIG H T
M ailFraud

22

(18U.S.C.j 1341)

2311

Backzround

24

(34) Theallegationscontainedinparagraphs(l)-(17)lntroduction-ThePartiesandThe

25

Entities ofCount l ofthis Indictm entare hereby re-alleged and incorporated herein as though fully

26

setforth atlength.

23

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 24 of 30

The Schem e to D efraud

(35) The allegationscontained in paragraphs (18)-(29)The Schemeto Defraud and

3 paragraphs (32 (a)) -(32 (s))M anner and M eans -The Incorporation Devioes;The So-called
'

4 dtFriendly Lien'''
,ThetBusinessOpportunities''Program ;and,TheProm otionalM aterialsofCount

1ofthisIndictmentarehereby realleged and incorporatedherein asthough fully setforth atlength.

(36) From onoraboutJtme29,2006,through atleaston oraboutJuly 17,2006,inthe

7 D istrictofN evada and elsewhere,the defendants,RICH AR D C.N EISW O NG ER and W ILLIA M

8 S.REED,with the intentto defraud,devised and willfully participated in,with knowledge ofits
9

fraudulentnattlretheabove-describedschem eandartificetodefraudandtoobtainmoneyandproperty

10 by m aterially false and fraudulentpretenses,representations,and prom ises.

11

(37) On oraboutthe dateslisted in thetablebelow,in the DistrictofNevada,forthe

12

purposeofexecutingorattemptingtoexecutetheabove-described schem eandartificeto defraudand

13

toobtainmoneyandpropertybyfalsepretenses,thedefendants,RICH ARD C.NEISW ONGER anII

14 W ILLIAM S.REED,knowingly caused to bedelivered by m ailand by a privateand com mercial

l5 interstate carrier according to the direction thereon the follow ing m atter described below for each
16

cotm tseach delively constituting a separate count:

l7

C ount

18

Date
July 7, 2006

Description ofM ailDelivery

FedEx delivery ofConsultantW holesale Purchase A greem ent

19

from 4601 W . SaharaA ve.,Suite 1,LmsV egas,N evada,to P.K .in

20

Iu less, Texas

21

July 14,2006

22
23

A PG ConsultantM anualm ailed from 4601 W .Sahara Ave.,Suite

1,Lms Vegas,N evada,to P.K .in Euless,Texas

July 17,2006

FedEx delively ofConsultantW holesale Purchase A greem entto

24

4601 W .Salzara A ve.,Suite 1,LasV egas,N evada,sentby C ,S.

25

from Hagerstown,M aryland

26

July 17,2006

A PG ConsultantM anualm ailed from 4601 W .Sahara A ve.,Suite

1,Las Vegas,N evada,to C.S.in H agerstow n,M aryland
24

'

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Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 25 of 30

b

'

July l7,2006

FedEx delivery from LasVegas,Nevada,ofcorporateminute

booksforCooper Creek H oldings, Inc.,to A .H .in lndianapolis,

tn(jiana

July 17, 2006

FedEx deliveryfrom LasVegms,Nevada,ofcom oratem inute

booksforStarliteFinanciallncorporated,Inc.,to H .R.in

Loveland, O hio

July 17,2006

FedEx delivery from LasVegas,Nevada,ofcom orate minute

books forDV C C onsulting,Inc.,to D .W .in PlantCity,Florida

9
10

A Ilin violation ofTitle 18, U nited States Code,Section 1341.

11
12

CO U N TS N IN E TH R O UG H FO UR TEEN
W ire Fraud

13

. (18U.S.C.j1343)

14

Backaround

15

(38) n eallegationscontainedinparagraphs(1)-(17)lntroduction-'ThePartiesandThe

16

Entitiesof Count 1 ofthisIndictm entare hereby re-alleged and incorporated herein asthough fully

17 setforth atlength.
18

The schem e to Defraud

19

(39) The allegationscontained in paragraphs(18)-(29)The Scheme to Defraud and

20 paragraphs (32 (a))-(32 (s))M annermld M eans -The Incorporation Devices;The So-called
21 ttyriendly''Lien Scheme;ThetsBujinessOpportunities''Program ;and,ThePromotionalM aterialsof
22

count l ofthis Indictm entare hereby re-alleged and incorporated herein as though fully setforth at

23

length.

24

(40) From on oraboutJune29,2006,through atleastonoraboutJuly 17,2006,inthe

25

D istrictofN evada and elsew here, thedefendants,RICH ARD C.NEISW ONGER andW ILLIAM

26

s. R EED ,w ith the intent to defraud,,devised and w illftzlly participated in,w ith know ledge ofits

25

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 26 of 30

fraudulentnaturetheabove-describedschemeandartificeto defraudandteobtainm oneyandpropelty

by m aterially faiseand fraudulentpretenses,representations,and prom ises.

(41) On oraboutthedateslisted in thetable below,in the DistrictofNevada,forthe

purposeofexecutingorattemptingtoexecutetheabove-described schem eandartificetodefraud,the
Defendants,RICHARD C.NEISW ONGER and W ILIJAM S.REED,knowingly caused to be
transmittedbymeansofwireccnzm unicatitm ininterstatecomm ercethesignalsandsoundsdescribed
below foreach count,each transm issicm constituting aseparatecount:
Count

Date

'

July 6,2006

D escription ofW ire Transm ission

$249,925wiretransferoutofthe APG escrow accountin Las

Vegas,N V to an accounsin H am ilton,Berm uda

10

July 13,2006

$110,761.93 wiretransferfrom E-Yradeto theAPG escrow

accountin Las Vegas,N V

1l

July l3,2006

$130,488.63w ire transferfrom E--l-radeto theAPG escrow

accountin LasVegas,NV

12

July 14,2006

13

July 14,2006

$26s000 wiretransferfrom theAPG escrow accountin LasVegas,

AIV to arlaccountin Vaduz,Liechtenstein

$24,950 wiretransferfrom theAPG escrow accountin LasVegas,

NV toan accountin Ham ilton,Berm uda
14
July 17,2006
$4,595.50 wiretransferinto the APG escrow accountin Las
Vegas,NV from an accountin Rouen,France
AIIin violation ofTitle 18,United StatesCode,Section 1343.
COUNT FIFTEEN
Conspiracv to Com m itM ailFraud artd W ire Fraud

(18U.S.C.9371)
Baokcround

(42) n eallegationscontainedinparagraphs(1)-(17)Introduction-ThePartiesandThe
Entities ofCount1 ofthis Indictm entare hereby re-alleged and incorporated herein asthough fully
setforth atlength.
The Schem e to Defraud

(43) The allegations contained in paragraphs (18)-(29)Tht Scheme to Defraud and

paragraphs(32 (a))-(32(s))M armerandM cans-ThcIncomerationDevices;TheSo-called

26

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 27 of 30

ldFriendly''Iwien Scheme;T'
heBusinessOpporttmities''Program ;and,ThePromtltionalM aterialsof
Caunt1efthisIndictm entare hereby re-alleged and incorporated llerein asthough fully setforthat
length.

(44) From on oraboutO ctober23,1998,theexactdatebeing unknown totheGrandJury,

and continuingthereafterupto and includingnoearlierthanJanuary4,2007,intheDistrictofNevada
and elsew here,
w ILLIA M S.REED and

m clu ltp CLNEISWISNGCR,

defendantsherein,togetherand with each otherandwith otherpersonsboth known and unknownto
theGrand Jury,did tmlawfully,willfully,and knowingly combine,conspire,confederate and agree
am ong them selvesand each otherto commitcertain offensesagainsttheUnited Statesto wit:m ail

fraud and wire fraud in violation ofTitle l8,United SutesCode,Sections 1341and 1343. Allin
violation ofTitle 18,United StatesCode,Section 371.
COUNTS SIXTEEN THROUGH TW ENTY-NINE
Incom eTax Evasion & Aidin: and Abettin:

(26U.S.C.j7201& 18U.S.C.j2)
(45) OnoraboutSeptember10,2002,throughonoraboutOctober1,2008,intheDistrict
ofNevada and elsewhere,thedefendant,W ILLIAM S.REED,did willfullyattem ptttlevade and
defeatthe pam entofa largepartofthe incom etmx dueand owingby Jam esDelm isTenito fortax
years 1987-1990,1992-1996 and 1998-2002 to the United States ofAm erica by concealing and
attem pting to conoealfrom the Intem al Revenue Selwice the natlzre and extent of Jam es D ennis
Territo's assets and the location thereof;m aking false statem ents to agents t)fthe IntenaalR evenue

Service;placingfundsM dpropeo ini eno esofnominees'

,establishingnomineecorporationsiand,
establishing nom inee bank accounts,defendant'sw illfulattem ptto evade taxesdue foreach tax year
constim tes a separate charge againstdefendantasprovided in !he chartbeltlw :

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 28 of 30

Count

Tax Year

Assessed Tax

Accrued Interest

M ay 2005Total

& Penalties

Balance D ue

16

1987

$15,646.87

$29,428.63
.

$45,075.50

4
5

17
18
19
20
21

1988
1989
1990
1992
1993

22

1994

9
10

23
24

1995
1996

$7,216.79
$2l,469.55
$8,304.44
$1,715.99
$2 549.97
,
$4 274 72
$4,642.89
$5,928.58

$8,345.95
$24,828.70
$9,710.73
$2,153.24
$3,348.93
$3 663.27
$4,170.45
$4,326.01

$15,562.74
$46,298.25
$18,015.l7
$3,869.23
$5,898.90
$7,937.99
$8,813.34
$10,254.59

11

1998
1999
2000
2001
2002

$35,441.26
$33,599,07
$91,957.52
$56,009.81
$83,845.26

$8,695.46
$9,741.70
$31,364.10
$17,399.82

$44,136.72
$43,340.77
$123,321.62
$73,409.63

14

25
26
27
28
29

$27,029,86

$110,875.12

15

Totals

$184,206.85

$556,809.57

l2
l3

$372,602.72

16

17

A1lin violation ofTitle26,United StatesCode,Section 7201.

1:

19

CO UN T T HIR.T-Y
M oney Laundering Conspiracy

2()

(18U.S.C.5 1956(h))

'

21

(46) From onoraboutOctober23,1998,theexactdatebeingunknowntotheGrandJury,

22

and continuingthereafteruptoandincludingnoearlierthanJanuazy4,2007,intheDistrictofN evada

23

and elsew here,

24

W ILLIA M S.R EED and

m clu lto c.xllsw dxcfR,

25

26 defendantsherein,did knowingly combine,conspire,confederateand agreetogetherand with other

1

28

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 29 of 30

persons,toconductandattempttoconducttinancialtransactionsaffectinginterstatecomm erce,which
ftmdswere in factderived from spccified unlawfulactivity,thatis,M ailFraud and W ireFraud,in

violationof18U.S.C.jj 1341& 1343,withtheintentto promotethecanyingonofthespecitied

unlaw fulactivityand knowingthatthetransactionsweredesigned in wholeorin partto concealand
disguise the nature,location,source,ow nershipyand oontrolofthe proceeds of specified unlaw ftll

activity,inviolationofTitle l8,U.S.C.5 1956(a)(1)(A)(I)and 1956(a)(1)(B)(I).

A1linviolationofTitle18,UnitedStatesCode,j1956t1$.
CO UN T T H IR TY -O N E
A ggravated Identity Theft

(18U.S.C.j1028A)
(47) From onoraboutDecember14,2004,theexactdatebeingunknowntotheGrandJury,
and continuing thereaherup to and including no earliertban Novem ber 1,2006,in theDistrictof
Nevada and elsewhere,
W ILLIAM S.REED,

defendanthereinsdid knowinglypossessand use,withoutlawfulauthority,ameansofidentitication

ofanotherperson,David K.,dtuing and in relation tothecomm ission ofW ireFraud,in violation of

U.S.C.j 1343,asdescribed in Count10 herein,a11in violation ofTitle 18,United StatesCode,

Section 1028A(a)(l).
CO UN T TH IR TY -TW O
Aggravated ldentity Theft

(l8U.S.C.j l028A)
(47) From onoraboutJanuary4,2005,theexactdatebeingunknowntotheGrand Jury,
and continuing thereaherup to and including no earlierthan Novem ber 1,2006,in the Districto
N evada and elsewhere,

W'
ILLIAM S.REED,
defendantherein,didknowinglypossessanduse,withoutlawftzlauthority,ameansofidentification

29

Case 2:11-cr-00247-JAD-CWH Document 1 Filed 07/05/11 Page 30 of 30

ofanotherperson,Timothy S.,dtlring and in relation to the comm ission ofW ireFraud,in violation

ofU.S.C.j 1343,asdescribed in Countl1herein,a1linviolationofTitle18,United StatesCode,

Section1028A(a)(l). yj
DATED:this

day ofJuly,20l1.

A TR UE BILL :

/s/
FO REPER SON O F TH E G RAN D JUR Y
D A N IEL G .BOG DEN
U nited StatesA ttorney

J.G REG OR D AM M
A ssistantU nited States Attorney

30