Texas accountant barred from forming sham captive insurance companies

A Texas-based accountant has been barred from promoting tax plans that use sham management companies or assisting in the creation of captive insurance companies. 

Charles Dombek and The Optimal Financial Group received permanent injunctions last week after they were alleged to have promoted a tax scheme enabling customers to use sham management classes to be taxed at lower rates. 

The order prohibits Dombek from preparing any federal tax returns for anyone other than himself and Optimal from preparing certain federal tax returns reflecting such tax plans. Dombek and Optimal consented to entry of the injunctions.

A statement from the US Department of Justice said: "According to the government’s complaint, Dombek is a licensed CPA and served as Optimal’s manager and president. Allegedly, Dombek and Optimal promoted a tax scheme throughout the United States to illegally reduce customers’ income tax liabilities by using sham management companies to improperly shift income to be taxed at lower tax rates, improperly defer taxable income or claim personal expenses as bogus business deductions. 

"As alleged by the government, Dombek promoted himself as the 'premier dental CPA' in America. The complaint further alleges that in promoting the schemes, Dombek and Optimal made false statements about the tax benefits of the scheme that they knew or had reason to know were false, then prepared and signed tax returns for their customers reflecting the sham transactions, expenses and deductions. The government contended that the total harm to the treasury from the scheme could have been $10 million or more."

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Each year the IRS highlights some of the tax scams that put taxpayers at risk of losing money, personal information, data and more. In the IRS’s most recent list, it specifically warned taxpayers “to beware of promoters peddling bogus tax schemes aimed at reducing taxes or avoiding them altogether.”

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