FOR IMMEDIATE RELEASE TAX

FRIDAY, FEBRUARY 24, 2006 (202) 514-2007

WWW.USDOJ.GOV TDD (202) 514-1888

Professional Tax Resister Sentenced to

More
Than 12 Years in Prison for Tax Fraud
WASHINGTON, D.C. – Longtime tax protestor Irwin Schiff was sentenced in
federal district court in Las Vegas to total of 163 months in prison—151 months for
tax fraud and an additional 12 months for contempt of court—the Department of
Justice and the Internal Revenue Service (IRS) announced today. In addition, Schiff
was ordered to pay more than $4.2 million in restitution and to serve three years of
supervised release.

In October 2005, Schiff was convicted of conspiring to defraud the United States,
aiding and assisting in the preparation of false income tax returns, filing his own
false tax returns, and evading the payment of millions of dollars in back taxes owed.
This marks the third time Schiff has been convicted for committing federal tax
offenses. Schiff previously has spent more than four years in jail for his tax crimes.
Two associates of Schiff, Cynthia Neun and Lawrence Cohen, were also convicted
of aiding and assisting other taxpayers in the filing of false tax returns. On February
3, 2006, Cohen was sentenced to 33 months in prison. Neun was sentenced
yesterday to 68 months in prison and ordered to pay $1.1 million in restitution.

“Last October, a jury of his peers found Mr. Schiff guilty of serious tax crimes
related not only to his own tax evasion, but also to his encouraging and enabling
others to file false returns. The prison sentence handed down today reflects the
seriousness of those crimes,” said Eileen J. O’Connor, Assistant Attorney General
for the Justice Department’s Tax Division. “The Department of Justice is working
vigorously to vindicate the interests of law-abiding Americans who file returns and
pay the taxes the law requires.”

“Mr. Schiff earned this sentence,” said IRS Commissioner Mark Everson. “For
years he has preyed on others by holding out false hope that they need not pay their
taxes.”

According to the indictment and the evidence introduced at trial, beginning in 1995,
Schiff aided thousands of taxpayers in the filing of false federal income tax returns
with the IRS that reported zero taxable income in spite of the taxpayers earning
reportable income. Schiff owned and operated Freedom Books, a business that sold
books, tapes, and informational packages encouraging customers not to pay income
tax. According to a government witness who testified at trial, between 1997 and
2002, Freedom Books sold more than $4.2 million of these products.

The evidence presented at trial also proved that Schiff evaded the payment of more
than $2 million in taxes he owed the IRS from 1979 through 1985. Schiff concealed
income he earned from Freedom Books, in part, by using offshore bank accounts
and conducting financial transactions through secret “warehouse” banking services.
The evidence also showed that Schiff used debit cards issued by offshore banks to
obtain funds he transferred offshore, that he opened bank accounts using multiple
tax identification numbers and that he concealed his wealth by hiding his assets
through the use of nominees.

Assistant Attorney General O’Connor thanked Tax Division Trial Attorneys Jeffrey
A. Neiman, David J. Ignall, and Melissa Schraibman, who prosecuted the case. She
also thanked Criminal Investigation Special Agents David Holland, Adam Steiner,
and Autumn Woodard of the IRS, and the U.S. Attorney’s Office for the District of
Nevada, whose assistance was essential to the successful investigation and
prosecution of the case.

Additional information about the Justice Department’s Tax Division and its
enforcement efforts may be found at http:www.usdoj.gov/tax.

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