HAWAII GUN DEALER JAILED FOR FOLLOWING LAWYER’S TAX EVASION SCHEME

Hawaii Gun Dealer Who Relied on Attorney Paul J. Sulla, Jr.’s Counsel is Convicted of Fraud, Conspiracy, Money Laundering, and Tax Evasion.

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By Nelson Daranciang, The Honolulu Star-Advertiser
Source: The Honolulu Star-Advertiser
Publication date: November 8, 2011

Nov. 08, 2011–Arthur Lee Ong’s career as one of the state’s biggest gun dealers is over, his lawyer said Monday after a jury in federal court found Ong guilty of conspiracy to defraud the government and failing to file income tax returns on time from 2000 to 2006.

Ong, 53, faces up to five years in prison for the conspiracy and each of six counts for the tax returns when he is sentenced in March. At that time he will become a convicted felon and be prohibited from possessing or owning a firearm.

Ong owns Magnum Firearms in Kakaako, which has long provided firearms and related products and services to the military, state and local law enforcement agencies and consumers.

The government says Ong conspired with convicted tax protester Royal LaMarr Hardy and Hawaii island lawyer Paul Sulla to evade paying taxes and stop filing individual income tax returns since 1994.

The prosecution said Ong set up sham trusts into which he diverted his earnings to evade paying income taxes. The government says Ong controlled the trusts and used money from the accounts to pay for personal expenses, including buying luxury cars and real estate.

Ong said he relied on the advice of Sulla, to whom he was referred by Hardy, and that because of his limited education, he did not know he was breaking the law. He said he just wanted to set up the trusts to benefit the Hawaii Baptist Foundation, his alma mater, Hawaii Baptist Academy, and Olivet Baptist Church.

His lawyer, Robert Fricke, said Ong has since paid all the income taxes he owes, including interest and penalties.

Prosecutor Timothy Stockwell said the amount Ong paid was computed by his own expert, not the government’s, and that he has yet to pay any back state income taxes.
Hardy and Sulla were not charged with any crimes and were identified in the indictment against Ong by their initials.

In 2005 Hardy was sentenced in federal court for willfully failing to file income tax returns and conspiracy to defraud the U.S.

Order Disqualifies Attorney Paul J. Sulla, Jr. for Lying in Conspiracy to Defraud the I.R.S. and Taxpayers.

Brief by Sherri Kane

According to The United States District Court for the District of Hawaii, Paul J. Sulla, Jr. was disqualified from defending convicted tax evader Bruce Robert Travis in 2007. Sulla, the prosecutors wrote, would be called to account for his counseling Travis to defraud the government in a conspiracy involving Royal Lamar Hardy, another convicted felon sentenced for defrauding clients by encouraging them to evade paying taxes that were legally required.

The order noted that Sulla had misrepresented Travis’s liabilities to the IRS.

Then, when facing honest questions posed by Hawaii Real Estate Commission officials, Sulla lied again. Travis’s company–Americorp International, LLC–applied for a license that Sulla argued should be granted. But the real estate licensing board voted to defeat Sulla’s “frivolous” arguments.

The order noted that Sulla, “should have known about the nature of the Research Foundation” that he endorsed among illegal tax havens. And he “should have realized that [Travis] could not claim payment to those groups as deductible charitable donations,“ the order stated.

“Mr. Sulla formed two limited liability companies for [Travis] in 2004. The Government” argued. “The purpose of one of the entities, Americorp International, LLC, was to hide Defendant’s income” from the IRS.

Travis defended fraudulently that he filed all the necessary tax returns since Sulla became his counsel.

But the prosecutors rebuked Travis’s defense, writing, “The Government also refutes Defendant’s claim that he has cooperated with the IRS since retaining Mr. Sulla in this matter. Since then, Defendant filed two false tax returns and filed frivolous complaints in the United States District Court for the District of Columbia. The Government asserts that Mr. Sulla assisted Defendant in at least the first of those filings . . .”

The only remaining question, since Travis was indicted and convicted, is why is Paul J. Sulla, Jr. still practicing law in Hawaii and still getting away with defrauding people such as Dr. Horowitz?

HAWAII JURY CONVICTS FIVE TAX FRAUD PROMOTERS TIED TO PAUL J. SULLA, JR. (See: http://www.justice.gov/tax/txdv05269.htm)