Former Bend Area Tax Protestors Sentenced to Federal Prison for Tax Evasion

EUGENE, OR—Chief U.S. District Court Judge Ann Aiken sentenced three former Bend area residents on Thursday to prison for conspiracy, tax evasion, and structuring. Jerry Miller, 61, of Redmond, was sentenced to 33 months in prison and three years of supervised release. He was also ordered to pay over $200,000 in restitution to the Internal Revenue Service (IRS). Mr. Miller was previously found guilty of five counts of income tax evasion and one count of conspiracy following a four-day jury trial.

William Cardwell, 62, of Carlton, was sentenced to 12 months and a day of in prison and three years of supervised release. Mr. Cardwell was ordered to pay $197,594 in restitution to the IRS. His wife, Jennifer Cardwell, 58, of Carlton, was sentenced to five months in prison to be followed by five months of home detention. She was also ordered to pay $114,379 in restitution to the IRS. The Cardwells previously pleaded guilty pursuant to plea agreements. Mr. Cardwell pleaded guilty to one count of tax evasion and to one count of structuring currency transactions to avoid reporting requirements. Ms. Cardwell pleaded guilty to one count of tax evasion.

According to evidence presented at trial, between 1995 and 2005, Miller and the Cardwells worked at Business Administrative Services (BAS), a company owned and operated by the Cardwells in Bend, Oregon. BAS was, in part, a payroll tax company.

Prior to 1995, Miller and the Cardwells regularly filed federal income tax returns with the IRS. In 1995 and 1996, Miller and the Cardwells began using abusive trusts to evade the assessment and collection of their federal income taxes. They further attempted to thwart the IRS’s efforts to assess and collect federal income taxes by entering into a “Professional Services Agreement” with BAS, whereby Miller and Mr. Cardwell agreed to donate their time to BAS, and in return, BAS agreed to pay their personal expenses. Miller and the Cardwells used BAS’s corporate bank account to pay many of their personal expenses. Additionally, Miller and the Cardwells used BAS to obtain preloaded ATM cards that were also used to pay personal expenses. In October 2005, Miller and the Cardwells also filed false federal income tax returns for 1998-2004.

The investigation was conducted by the Internal Revenue Service - Criminal Investigation. The case was prosecuted by Assistant U.S. Attorneys William “Bud” Fitzgerald and Scott Bradford.