TARGETED Chapter 84 Under the Hot Lights (A true story)

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                                                          Under the Hot Lights

            The FBI report of the event read that I was born on December 7, 1952 in Gardena, California.  At least that was where the hospital was. That I lived at #14 Daisy Meadow Terrace, Henderson, Nevada a suburb of Las Vegas. The report read like something out of a cop show episode.     

It said that I “...voluntarily appeared at the Provo Resident Agency of the Federal Bureau of Investigation. After having been advised of the identities of the investigating Agents, as well as the nature and purpose of the investigation being conducted, I thereafter voluntarily provided the following information.” See FBI transcription dated 11/02/1999.

Clean, sanitized, and completely believable later in a federal court. What really happened was later hidden by flat out lies and deception on the Court.  Ironically the very crimes that they proposed I was guilty of were being employed by agents through the very methods they had used to extract information.

              “WHY ARE YOU PROTECTING HIM!” McDermott shouted in my face.

            “I'm not hiding anything.” I tried in greatest sincerity to tell the whole truth.  I did in fact hide nothing.

“LIAR!” shouted McDermott.

“I don't lie. You have to believe...”

“LIAR!” again he shouted cutting me off in midsentence. .

              By then Agent McDermott was not only shouting but practicing invasion techniques to reduce the will of the one being interrogated by getting inches from my face while shouting at the top of his voice. Both agents, Anderson and McDermott, were physically much bigger men than me. I was intimidated by their being obviously armed.   They repeatedly made sure I saw that they were. Agent McDermott even pulled back his coat in an obvious effort to expose his weapon. The door to outside was locked. The door to the conference was also closed and seemed to be locked.

“Look, this is not necessary.You need to calm down.”  I attempted to appeal to their logic. 

No one had ever treated me like this.  Such contempt, such complete lack of respect, and a complete disregard for my Constitutional rights fell from every syllable.  They had both told me coming in, before I had made a statement, that I was “not” the subject of the investigation, and that I had nothing to worry about.  That is until they were not satisfied with my answers.  It was plain that McDermott was venting and angry.  He was mad because I upended his investigation with Koskella and now he wanted me to pay for it and be included in his aggressive investigation.

They later testified that they had given me my Miranda rights.  They most definitely did not.  They were doing their best to scare me into some kind of admission or to share evidence about Koskella that they either possessed or were hoping to gain possession of.  They continued for hours.

              “TOO LATE! LIAR! YOU ARE GOING TO PRISON FOR A VERY LONG TIME!” Agent McDermott began pounding out his words with his fist on the table to make sure I understood that he was serious and that he was not going to be distracted by any claims of innocence.

            “WE HAVE ALL OF THE EVIDENCE THAT WE NEED TO PROSECUTE YOU! YOU ARE GOING TO PRISON!"

They began asking me about random names and facts that I had never heard of before.  After each denial I was proclaimed a liar and a criminal over and over again.

              Then they began proposing scenarios as to how Koskella built his offshore business, again they repeated the names of potential victims, suggested how secret funds were created and claimed I had a hand in creating them.  They said they had proof over and over again.

            “I am telling you I did not know that there was anything illegal going on.”

              “YOU ARE A CRIMINAL!  YOU WILL BE PUNISHED!”

            “I have never committed a criminal act in my life. I have never been arrested or prosecuted for anything. I am a father of ten children. I go to Church faithfully every week. I teach Sunday School. My youngest is five months old. Why would I want to commit a crime?”

Agents McDermott and Anderson seemed to back down for the moment.

            Anderson made an odd admission. “It is true that you gained no financial reward that we have been able to find.”

I saw an opening.  Surely these men would respond to reason. The truth had to mean something to them. It had occurred to me that I could not leave the room with any hope unless I found a way to reason with these two.

“I have gone to college. I have four degrees including a Bachelors, Masters and Law Degree, all from Brigham Young University. I do not lie and I do not cheat. Please believe me.”

            “Why should we?” Anderson posed the question without screaming.

“You think that I am some kind of expert in offshore investments and foreign trusts. Have you looked at my employment history?”

Both remained nonresponsive.

“I worked as a law clerk after getting out of law school in 1983 for nearly two years because my first three attempts to pass the California Bar exam failed. Granted I was working a full time job and did not have time to really study, but the fact is I didn't pass. It wasn't until I came back to Utah that I finally passed. I became corporate counsel for Western Reserve Oil and Gas. It was a company in West Virginia that required me to commute back and forth. It was very hard on the family.”

              “Why did you quit?” Anderson asked again calmly.

            “I didn't quit. The Company was taken over by the IRS who insisted that I remain in charge while they completed the seizure of the company that took over six months. The Agent who eventually took over the property and operations said I had done a very good job. He said it was a 'nice little oil company' and that it was turning a fair profit. I was then attacked by another faction of the IRS which assessed me $21,000,000 and called me a corporate officer. It took nearly two years to clear it up and a great deal of stress.  It was in response to a law suit I had filed on behalf of the former owner to try to get his company back. The response of the IRS was not to fight the suit so much as to come after me.”

            “I had been a Systems Controller and real estate researcher for Coldwell Banker in California for three and one half years so I understood the property issues. I also worked as a Comptroller for Pacific Northwest Industries and as an office manger for a Plumping Contractor.”

McDermott and Anderson looked at each other and confirmed something written on a sheet they had between them. Anderson asked, “So you do have an accounting background?”

            “Yes, I also worked for a law firm in Irvine, California when I made another attempt to pass the California Bar. I again failed twice in one year and returned to Utah to stay.”

“When did you begin doing trust work?”

“I actually started doing family living trusts in about 1990.”  The agents seemed to calm down and I even found myself beginning to relax a little since the shouting seemed to have stopped.  As I had suspected once they knew the truth they would become reasonable and stop the “bad cop bad cop” routine.  I also knew from hard experience with many clients that when dealing with an IRS Special Agent the courts in the immediate future would be of no help.  He could seize my accounts, call for an audit, scare my employer, and ruin my credit history long before I could seek any kind of protection from the courts.  Honestly I knew the likely outcome would be for the Court to side with the IRS anyway.  I knew that if I could handle it here it would end with our meeting.  I was beginning to become hopeful. My heart rate had dropped significantly.  It felt as though these agents would actually let me finish telling my side of the story.

              “When did you meet Attorney Delbert Phillips?”

              “I first met Delbert Phillips at a CLE, a Continuing Legal Education seminar, that was being given at the Bar Association's Legal Justice Center in Salt Lake City. As you know Phillips is confined to a wheelchair. He has CP, cerebral palsy, and is limited in what he can do. There is nothing wrong with his mind, but his body is a constant challenge.”

            “How often did you attend seminars dealing with trusts and taxes?”

Now that was a loaded question. I tried my best to remember. “About maybe 15 seminars in all the years I have been in practice, which by this date is nearly 15 years, so about one per year.”

            “What have you done to prepare yourself in your tax practice then?” McDermott was fishing.

I made a confession that surprised the Agents. “I spent some significant time studying the Internal Revenue Service Training Manuals and Title 26 of the US Code.”  

I could see the sudden anger begin to return to Agent McDermott's face. I thought it might be best to add a quick disclaimer. These were manuals containing the ''secret'' practices used by IRS Agents to quite literally take advantage of the system. They were not supposed to fall into the hands of the “enemy” a.k.a. Tax Attorneys.

“How in the hell did you obtain Service Manuals?” His voice was threatening.  

“They were given to me by a former IRS Agent. I also became involved in a series of tax cases for which I had become legal counsel. The Manuals proved very helpful in getting to the real issues of the cases.”

            “No doubt.”    McDermott was clearly not impressed. Perhaps it was a reminder of the episode with Judge David Sam.

There was a sudden chill in the air. McDermott seemed ready to resume his attack. I thought it time to soften the edge.

“It was while I was handling the tax audit of Dennis Shaw in 1994 that I came to meet  IRS Agent Clive London. We had a very good understanding, or so I thought. I told him about my family living trust. He asked to see it and I openly provided him with a copy.”

            “Did he take it with him?” Anderson also saw McDermott was about to explode again.

“Yes he did because I suggested, and he agreed, that it was better if he looked it over and told me what he thought should be changed so that he and I would not have to meet again for an audit of an estate that had not been properly prepared. He agreed to look it over and get back to me.”

              McDermott acted a little shocked. “He told you he would indorse your trust? Koskella was telling people he had a fool proof trust that the IRS would not be able to break. DID YOU PROVIDE THAT TO HIM!”

            “All I had was a purely innocent domestic document. No offshore anything.  No evasive structure. It was just a simple family living trust that worked in harmony with their pour over wills and complied with the IRS Code.”

              “But Koskella got it didn't he?”

            “I suppose he could have got it from Phillips. We were loosely informally partners in 1992 to 1995 and I did share it with Phillips who asked as a professional courtesy to see it.  I had no objection and I did not know then that Phillips would later come to work for Koskella. I would not have supplied it to him had I known Koskella would get it.”

“So you freely admit that Koskella could have had your trust and used it to set up his off shore program.”

              “You just don’t get it. Look! I communicated with London for months about my Family Living Trust. We had phone calls and meetings. He would review my family trust and make suggestions about changes. I would make the changes and he would review it again. Each time the number of changes decreased until we had a document we were both comfortable with. That is the way it should be done. We worked together.”

              “And then you asked him to indorse it.”

            “As a matter of fact we had an understanding from the very beginning that he WOULD NOT indorse it. It was done off the record and purely in a good faith effort to do the right thing. It was to satisfy the IRS Code and properly treat the subject of the trust relationship to the family.  No offshore nonsense.  No suggestion of tax evasion. It was purely a good faith effort to comply with the practical side of compliance."

“And then you sold it to Koskella telling him that it was a ‘bullet proof’ trust that the IRS would not challenge.”

“That never happened.”

            There was a pause and then without regard for anything I had said the melee continued unabated.

              “LIAR! YOU ARE IN VERY SERIOUS TROUBLE AND ARE GOING TO PRISON FOR A VERY LONG TIME!”