FOR IMMEDIATE RELEASE
THURSDAY, APRIL 10, 2003
WWW.USDOJ.GOV
TAX
(202) 514-2007
TDD (202) 514-1888

DEPARTMENT OF JUSTICE SUES TO STOP CALIFORNIA ATTORNEY FROM PROMOTING TAX
SCAMS

Attorney Allegedly Falsely Advises Customers They Do Not Have to Pay Federal
Taxes

WASHINGTON, D.C. - The Department of Justice's Tax Division, working with
the U.S. Attorney's Office for the Central District of California, today
filed suit in federal court in Los Angeles to stop California attorney
Eduardo Marmolejo Rivera from promoting several abusive tax scams. Rivera
allegedly promotes three main scams: he sells opinion letters falsely
stating that his customers are not liable for federal income taxes; he
represents his customers before the Internal Revenue Service for the stated
purpose of determining their "non-liability" for all federal taxes; and he
sells an "asset protection" service that he falsely implies can shield his
customers' assets from IRS levies.

"Tax scammers enrich themselves by helping others violate the law," said
Eileen J. O'Connor, Assistant Attorney General for the Justice Department's
Tax Division. "The Justice Department will shut down abuses of the public
trust by people who promote tax scams, including those run by licensed
professionals."

According to papers filed by the Justice Department, Rivera bases his scams
on the false notion that only federal employees have to pay taxes. He
allegedly directs his customers not to file returns or pay taxes, and tells
employers to stop withholding taxes from their employees' wages. In its suit
papers, the Justice Department states that the IRS is presently unable to
estimate the cost to the Treasury caused by Rivera's activities; court
papers note that the IRS has asserted that six Rivera customers, identified
by the agency, owe more than $9.5 million in taxes, interest and penalties.

Tax scams cost taxpayers billions of dollars every year. According to a
General Accounting Office report (GAO-02-733) issued last year, however,
stepped-up efforts by the IRS and Justice Department to crack down on these
scams have led to increasing numbers of convictions of tax fraud promoters.
The report can be found online at http://www.gao.gov/new.items/d02733.pdf.