In documents filed Monday in U. S. District Court for the Western District of Missouri, government prosecutors in the fraud case against Carthage surgeon Brian Ellefsen asked for a hearing to determine if Ellefsen's attorney has a conflict of interest that should keep him from being involved in the case.
Ellefsen and his brother, Mark, a Carthage accountant, were indicted in April for tax fraud. The brothers are represented by different lawyers.
Brian Ellefsen's lawyer, Robert Alan Jones, Las Vegas, has represented numerous clients of Aegis, the Illinois-based company which, according to court documents "marketed and sold trust packages throughout the United States through a network of promoters, sub-promoters, managers, attorneys and accountants. Aegis, and many of its organizers and clients currently face prosecution in the Northern District of Illinois and throughout the United States, for tax evasion, false income tax returns, conspiracy to defraud the United States, and similar offenses." The prosecutors say Jones is representing Aegis clients in South Dakota, West Virginia, Illinois, and Ohio.
"Mr. Jones is one of the defense attorneys which Aegis recommends by name to its clients, and has benefited financially from his involvement in Aegis through fees paid by clients referred by Aegis and by his representation of at least one promoter and one return preparer." Pleadings in one case, the prosecutors say "indicate Mr. Jones has represented other Aegis clients having potential conflicts of interest in both criminal and tax court matters simultaneously."
Though he is recommended by Aegis, the prosecutors say "Press accounts of Mr. Jones's other trials involving Aegis clients indicate that, in at least one case, he argued that his clients had been 'duped' by the Aegis accountants." When the government sent Jones a letter indicating it would recommend an investigation into whether he had conflicts of interest, Jones evaded the issue, they said, and instead threatened to file ethical complaints against the prosecutors.
In their filing, prosecutors noted that "evidence Mr. Jones otherwise would introduce to exculpate defendant Brian Ellefsen may tend to incriminate his other clients."
The possibility also exists, court documents indicate, that Jones may have a prior role in the Ellefsen case. "The government is unaware at what point the defendants first obtained legal or tax advice from Mr. Jones." If Ellefsen says he relied on Jones' advice, then Jones would have to be called as a witness and therefore would have a conflict of interest, according to the prosecutors.
The Ellefsens pleaded not guilty in May. The Ellefsens were indicted in April by a federal grand jury. According to court documents, the Ellefsens were involved in a 10-year scheme to divert at least $1.567 million into offshore accounts to avoid paying income tax. Mark Ellefsen was office manager for Southwest Bone and Joint, the business run by Brian Ellefsen.
The indictment said Brian Ellefsen used the diverted funds to "pay for cash withdrawals and charges made on the offshore credit card, payments for (his) personal expenses, payments on loans owned by (him), expenditures for the construction of (his) family home, and expenditures for the purchase of another residence located on Table Rock Lake, Missouri."
The Ellefsens misled the accounting firm preparing their income tax returns, according to the indictments, causing false income tax returns to be filed.