Montrose - Daily Press

DENVER — A Grand Junction woman was the latest to be convicted in a tax fraud case that’s landed numerous defendants, including a Montrose couple, in hot water.

A federal jury convicted Kris Smith, 52, of filing two false federal income tax returns, failure to file a partnership federal income tax and filing a false refund claim. She faces a maximum sentence of 10 years in prison and a $100,000 fine for each violation.

Smith was found to be a member of Anderson’s Ark Associates and of utilizing a “complex business organization,” a type of tax scheme used to eliminate current-year taxes. The jury found she’d also recovered a refund of more than $70,000.

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The scheme involved a sham partnership, owned primarily by Smith, a Department of Justice news release said. She created an operating loss large enough to eliminate current-year taxes and carry back two prior years to recover more past-year taxes.

The release said Smith also became an information officer within the organization in 2000, which enabled her to promote and market fraudulent tax programs at meetings and seminars hosted by Anderson’s Ark Associates.

That organization, which by 2001 had an estimated 1,500 clients, promoted and sold fraudulent tax shelters and investment scams.

To date, 16 clients have been indicted; seven pleaded guilty and two were convicted.

Montrose residents James and Pamela Moran were convicted in late 2004 as promoters of AAA’s schemes, but deny they are guilty of conspiring to defraud the government, mail fraud, wire fraud, money laundering and aiding the filing of false tax returns.

At last report, they were appealing the verdict against them.

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