Colorado Man Pleads Guilty to $45 Million Tax Evasion Scheme

Timothy McPhee, a Colorado man from Estes Park, pleaded guilty to conspiracy to defraud the United States, tax evasion, and wire fraud related to promoting and operating an illegal tax shelter and a fraudulent investment scheme. From 2018 to 2023, McPhee marketed a tax shelter involving a private family foundation and three trusts, instructing clients to funnel nearly all their income through these entities to evade paying federal income taxes, resulting in about $45 million in unpaid taxes. He also used the scheme to conceal over $5 million of his own income, avoiding approximately $1.8 million in federal income taxes. Additionally, McPhee ran a fraudulent investment scheme promising 3% monthly returns, but instead spent the funds on personal expenses and investments. He admitted to knowingly giving clients directions that contradicted IRS guidance and ignored warnings from professionals about the illegality of the tax shelter. McPhee faces sentencing and significant prison time for his crimes.