- Texas man Larry Conner pleaded guilty to tax fraud involving a forty-three million dollar loss to the United States Treasury.
- The scheme utilized abusive trust tax shelters to falsely shield one hundred fifty-six million dollars in taxable income.
- Conner faces a maximum five-year prison sentence with a formal court sentencing hearing scheduled for January twenty-sixth, twenty twenty-seven.
Larry C. Conner, a 69-year-old man from Frisco, Texas, pleaded guilty August 12, 2026, to conspiring to defraud the United States through an abusive trust tax shelter that caused an estimated $43 million tax loss. The Justice Department announced the plea August 13, 2026.
The promoter admitted selling the arrangement to taxpayers nationwide and using it himself. He faces a maximum of five years in prison.
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The scheme ran from at least February 2018 through September 2023. Conner and others caused false returns to be filed for approximately $156 million in income, prosecutors said.
He also acknowledged using the structure from 2016 through 2021 to evade taxes on roughly $5.2 million of his own income. A federal district court judge is scheduled to sentence him January 26, 2027.
The charge is conspiracy to defraud the United States, an offense commonly brought under 18 U.S.C. § 371. The case was investigated by IRS Criminal Investigation.
The trust structure promised control while shifting reported income
Conner promoted the arrangement through The Business Solutions Group, which held in-person seminars around the country and in Cabo San Lucas, Mexico. Clients typically paid between $25,000 and $50,000 to establish the trusts and foundation.
The marketing slogan was “own nothing, control everything.” Promoters told high-net-worth business owners they could eliminate as much as 98% of their tax liability while retaining control of their assets.
The system used several layers. Clients were instructed to route income through three purported “non-grantor” trusts and a so-called “private family foundation.”
The filings also claimed deductions for personal living expenses that were not deductible and for charitable contributions prosecutors described as bogus. The structure therefore affected both the reporting of income and the expenses taxpayers claimed against it.
The Justice Department’s Office of Public Affairs said Conner received repeated warnings before continuing to promote the shelters.
“Conner admitted that he knew the tax shelters he promoted were fraudulent based on repeated warnings he received from attorneys and accountants. and his knowledge and receipt of materials that the IRS publishes to educate the public about the illegal nature of abusive trust tax shelters.”
The admission described a promoter who had access to professional warnings and IRS educational materials while continuing to market the arrangement.
The operation relied on promoters, preparers and financial professionals
The investigation identified a network that helped market, document and administer the structure. Timothy McPhee and Marcia Predmore, a Colorado couple, helped host seminars. McPhee is serving a 151-month prison sentence for his role.
Weldon Wulstein, a Nevada-based CPA, prepared hundreds of false tax returns for clients. Suzanne Thompson, a Wyoming-based bookkeeper, prepared fraudulent financial statements.
Roderick Prescott, a Mesquite, Nevada man, promoted the private family foundation layer. Kent Ellsworth, an Arizona-based tax preparer, also participated in the network.
The roles covered the scheme’s main operating needs. Some participants promoted the structure directly, while others prepared returns or produced financial records used to support it.
Chief Jim Lee of IRS Criminal Investigation has emphasized in related convictions that agents will “hold those involved in abusive tax shelter schemes accountable.” The agency’s investigation into the trust arrangement produced a case involving both the people who sold it and the taxpayers whose income passed through it.
Conner’s own tax reporting formed part of the guilty plea
Conner was not only a promoter. He admitted applying the same structure to his personal income during a five-year period.
That income totaled roughly $5.2 million between 2016 and 2021. His admission tied his personal tax reporting to the arrangement he marketed to clients.
The government’s case also alleged that the broader operation used the purported trusts and foundation to make taxable income appear shielded and to support deductions that taxpayers could not lawfully claim. False returns covered approximately $156 million in income.
The figures show the difference between the scheme’s reach and the loss calculated by the government. Taxpayers reported approximately $156 million through the structure, while the resulting loss to the U.S. Treasury reached about $43 million.
Conner’s sentencing will follow the guilty plea. The scheduled date is January 26, 2027, and the statutory maximum remains five years in prison.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
