Compliance April 14, 2011

Administrator Busted for Bogus Retirement Plans Scam

April 14, 2011 (PLANSPONSOR.com) - A federal court has permanently barred William Alexander and his two companies, Retirement Plan Services Inc. and Lyons Pensions Inc., from selling or administering pension plans or employee welfare-benefit plans.
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The Justice Department announced that its August 2010 lawsuit against Alexander alleged that he helped small business owners create bogus pension plans so they could re-characterize their salaries as pension-plan contributions.   Alexander then allegedly caused the sham contributions to be refunded to his customers through fake loans from the plans.     

According to the announcement, Alexander advised his customers that they could deduct the purported contributions in order to reduce or eliminate their federal income taxes.  The complaint also alleged that Alexander fraudulently misrepresented his customers’ non-deductible personal expenses as deductible pension-plan contributions.     

The government alleged that Alexander’s promotion of these schemes cost the government at least $30 million.  

The court’s order, to which Alexander and his companies consented, also prohibits Alexander from preparing federal tax returns for others for a fee or representing others before the Internal Revenue Service.

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