(CN) – Three men, including a father and son, bilked dozens of people out of $35 million by convincing them to invest in fictitious cemeteries, according to a federal complaint in Washington, D.C.
The United States says Michael A. Strauss and his son Patrick B. Strauss teamed up with Joseph Barreiro to concoct the labyrinthine tax fraud.
They allegedly pretended to operate two cemeteries – one near the Civil War battlefield in Chancellorsville, Va., the other in upstate New York – and a bogus charity called Dignified Charitable Burials.
“Defendants have evaded the law for more than a decade by moving from one scam to the next, modifying or abandoning their schemes to stay step or two ahead of law enforcement, and by using a vast number of shell entities and alter egos, which defendants likewise create or discard as needed, so as to conceal defendants’ roles and the true nature of their illegal schemes,” the complaint says.
The current lawsuit focuses specifically on an alleged scam the trio ran from 2003 to 2008. During that time, the government says the men duped investors by promising to quintuple their investment in tax benefits. They made the same pitch to taxpayers looking for charitable deductions.
During the period when they claimed to run the Chancellorsville cemetery – not far from the historic town of Fredericksburg, Va. – the trio told investors they had bought a $90 million license to perform funeral services there, according to the complaint.
That claim helped the men collect $1.5 million from 13 investors, some of whom gave the conspirators money on multiple occasions.
A similar scheme involved a sham cemetery in New York, which allowed the trio to bring collect $5 million from about a dozen investors.
Another dozen investors gave more than $1 million to the phony charity, which claimed to have purchased 285,000 burial-site certificates meant to let holders have their cremated remains buried at the fake New York cemetery.
In addition to the current civil lawsuit, Michael A. Strauss faces a separate fraud suit in the District of Columbia Superior Court. The government says he is also a “convicted felon.”
When the fraud suit was filed, Strauss ran numerous evidence-destruction software programs on his personal computer, including programs titled “Evidence Destroyer,” “File Shredder” and “Stellar Wipe Professional” to destroy documents relevant to his various schemes, according to the Justice Department.
The government seeks preliminary and permanent injunctive relief and postjudgment discovery to monitor compliance with the injunction. It also asks the court to retain jurisdiction to enforce the judgment and any additional orders that are deemed necessary.
The case is being handled by U.S. Attorney Ronald C. Machen Jr. in Washington.