Texas Man Pleads Guilty to IRS Fraud Conspiracy Involving $43 Million Tax Loss
(Denver, CO = Alex Walczak) A Texas man has admitted to promoting and selling a fraudulent tax shelter that resulted in a staggering $43 million loss for the IRS, marking a significant development in ongoing efforts to combat tax fraud.
On August 13, 2026, Larry C. Conner, 69, from Frisco, Texas, pleaded guilty to conspiring to defraud the IRS by promoting an illegal tax shelter. This scheme, which ran from February 2018 to September 2023, involved Conner and several co-conspirators misleading taxpayers nationwide into diverting nearly all of their income through a series of three so-called ‘non-grantor’ trusts and a ‘private family foundation’ to evade tax assessments.
Conner operated under the name of The Business Solutions Group (TBSG), conducting in-person seminars to sell these fraudulent trusts, charging clients between $25,000 and $50,000 for his services. Court documents reveal that Conner was aware of the illegality of the tax shelters, having received multiple warnings from legal and accounting professionals, as well as IRS materials outlining the fraudulent nature of such schemes.
From 2016 to 2021, Conner personally utilized the abusive trust tax shelter to evade taxes on approximately $5.2 million of his income. He collaborated with several individuals, including Colorado residents Timothy McPhee and Marcia Predmore, Nevada CPA Weldon Wulstein, Wyoming accountant Suzanne Thompson, Mesquite resident Roderick Prescott, and Arizona tax preparer Kent Ellsworth. Together, they filed false tax returns that fraudulently sheltered around $156 million in income, leading to the IRS’s estimated $43 million tax loss.
McPhee has already pleaded guilty to conspiracy to defraud the United States and is currently serving a 151-month prison sentence. In a separate trial held in May and June 2026, Predmore, Wulstein, Thompson, and Prescott were found guilty of conspiracy to defraud the United States and are scheduled for sentencing in January 2027. Ellsworth has also pleaded guilty to charges related to false tax returns and awaits sentencing on December 7.
Conner is set to be sentenced on January 26, 2027, facing a maximum of five years in prison. The federal judge will determine his sentence based on U.S. Sentencing Guidelines and other legal factors.
Colin McDonald, Assistant Attorney General of the Justice Department’s National Fraud Enforcement Division, emphasized the government’s commitment to investigating and prosecuting fraud against American citizens. The IRS Criminal Investigation unit led the investigation, with Lauren K. Pope and Amanda R. Scott prosecuting the case. This incident is part of a broader initiative to eliminate fraud, waste, and abuse in federal benefit programs, aligning with President Trump’s Task Force to combat fraud.
