Indian American Financial Planner Admits Guilt in Facilitating Illegal Charitable Contribution Tax Scheme

HI INDIA NEWS DESK
CLEVELAND, OH A financial planner from the Cleveland area, Rao Garuda, pleaded guilty to conspiracy to defraud the United States and assisting in the filing of a false tax return.

Garuda, the President and CEO of Associated Concepts Agency, Inc. (ACA), participated in a scheme called the Advanced Legacy Plan or the Ultimate Tax Plan, which aimed to help high-income individuals unlawfully reduce their taxes. The scheme involved transferring assets to a limited liability company (LLC), assigning ownership to a co-conspirator-controlled charity, and claiming a charitable contribution tax deduction. Garuda and others marketed the plan as a way to receive the deduction while maintaining control over the assets. Despite being warned by attorneys that the scheme was illegal, Garuda continued to promote it. He caused a tax loss of over $2.7 million and agreed to pay restitution to the United States. Garuda, along with others, also assisted clients in backdating documents to claim charitable contribution tax deductions for previous years. They used preexisting LLCs created by a co-conspirator and made it appear as if clients owned and assigned ownership interests in these LLCs in prior years. Garuda faces a maximum sentence of five years for conspiracy to defraud the United States and three years for the false return count.

The sentencing is scheduled for November 14, 2023. The case is being investigated by the IRS-Criminal Investigation. Acting Deputy Assistant Attorney General Stuart M. Goldberg and U.S. Attorney Michelle M. Baeppler announced the guilty plea. The case is being prosecuted by Assistant Chief Michael Boteler, Trial Attorneys Casey S. Smith and Andrew Ascencio of the Justice Department’s Tax Division, and Assistant U.S. Attorney Elliott Morrison of the Northern District of Ohio.