Thursday, June 14, 2007

Woman who organized Ellefsen companies pleaded fifth before federal grand jury

Federal court documents indicate that Karen Ritter, the woman who organized two alleged shell companies for Brian and Mark Ellefsen, exercised her Fifth Amendment privilege against self-incrimination before a federal grand jury in 2005.

Brian Ellefsen, a Carthage surgeon, and his brother Mark, an accountant, were indicted in April for tax fraud.
Their arrests were part of an ongoing federal investigation of the Aegis Company of Palos Hills, Ill. Aegis officials were indicted in April 2004 and charged with defrauding the U. S. Government of more than $68 million.

In a filing May 30 in U. S. District Court for the Western District of Missouri, the Ellefsens asked the court to waive the right for a speedy trial because more time was needed to prepare a defense because of the complexity of the case:

This indictment is linked to a nationwide Internal Revenue Service/U. S. Department of Justice project aimed both civilly and criminally at the Aegis Business Trust System, the Aegis Company, its promoters, attorneys, accountants and purchasers/investors."

The scope of the investigation was noted in the Department of Justice news release from April 2004:

Six of the defendants allegedly participated in a nearly decade-long conspiracy to market and sell sham domestic and foreign trusts through The Aegis Company, based in suburban Palos Hills, to some 650 wealthy taxpayer clients throughout the United States to hide hundreds of millions of dollars in income, resulting in a tax loss to the United States of at least $68 million, making the case one of the largest of its kind. Following a lengthy undercover investigation by IRS agents, code-named "Operation Trust Me" and the seizure of roughly 1.5 million documents, computer files and related materials, a federal grand jury in Chicago today returned a 51-count indictment against six of the defendants.

According to filings with the Missouri Secretary of State's office, Karen Ritter, Palo Hills, Ill. is listed as an organizer of two limited liability corporations set up by Mark Ellefsen: Custom Billing, LLC., created on June 20, 2002 and Strategic Management Services, LLC, created Dec. 28, 2000.

Ms. Ritter was a target of the Aegis investigation, according to documents filed in 2005 in a related government case against banker Denny Partridge. When subpoenaed to testify on Partridge's behalf, she filed paper indicating her intention to plead the Fifth Amendment if she took the stand.

The papers said when she was called to testify before a federal grand jury in "a parallel investigation," but took the Fifth:

"She was informed she was the target of that investigation. Agents told her charges would be brought and she would be indicted for her participation in what they called fraudulent investment. Ritter worked at Heritage Management Services in the capacity of administrative assistant. (Aegis is a subsidiary of Heritage Management Services.)

"She was present on three marketing trips and according to the government is even on recordings which were made on one of the trips."

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