Rogue advisors on parade

A federal jury convicted six men in a $60 million tax scam that peddled phony trusts through a Chicago firm to nearly 700 wealthy clients. The advisors were convicted of diverting income from businesses into sham trusts, hiding millions of dollars of income and producing a $60 million tax-revenue loss to the U.S. government. The May 2008 convictions join more than 30 other convictions relating to the so-called “abusive trust” scheme. The felons will be sentenced in August and September.

A Kentucky financial planner got 37 months in prison for conspiracy and tax fraud relating to an off-shore insurance fraud. The planner operated an insurance agency that conspired with an insurance company in the U.S. Virgin Islands to sell phony “loss of income” insurance. The “policies” were sold as a tax-deductible vehicle that would return nearly 85 percent of the premium paid through a supposedly non-taxable offshore loan or investment.