Chiropractor sentenced over tax-shelter scheme

A chiropractor from Washington state has been sentenced to serve a year and a half in federal prison for helping to sell a fraudulent tax-shelter scheme to more than 300 people that resulted in a loss of millions in tax revenue to the Internal Revenue Service.

Lance Hatch appeared in U.S. District Court along with his attorney to face sentencing on tax fraud. Hatch told the court that he became involved in helping to sell a program which advised people to place funds into trusts in order to avoid paying taxes back in 1993 in Utah. Although he only sold three or four programs out of 300 — making him about $3,500 in profit — prosecutors said Hatch could be responsible for about $1 million in tax liability associated with unpaid taxes of his clients.

In court, Hatch offered an apology and expressed regret for his actions. A federal prosecutor said Hatch should be given credit for cooperating with authorities in prosecuting others but should face punishment for his crime.

U.S. District Judge Ted Stewart imposed a 20-month sentence and ordered that Hatch self-surrender on Sept. 11. Hatch was also ordered to pay a $10,000 fine.

Hatch is among several people prosecuted in the fraudulent trust scheme. Among others were attorneys and certified public accountants.

Last February, an accountant and former IRS employee was sentenced to serve 21 months in federal prison for his involvement and to pay the IRS $157,000.

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