Tax Protester Sentenced in Pennsylvania

  • July 15, 2008


A U.S. district judge in Pennsylvania sentenced a former tax protester turned government informant to 14 months in federal prison for conspiracy to defraud the IRS.

The judge sentenced Wayne Rebuck, 59, on July 9, 2008.  Rebuck was the one-time Director of Operations for  the Commonwealth Trust Company, an organization that for 20 years had specialized in marketing bogus trusts in the U.S. and Canada that it claimed could be used to hide assets and avoid paying taxes.  As a result, numerous individuals filed fraudulent tax returns.

Bogus trusts are among the most common tax fraud schemes used by adherents of the right-wing anti-government "patriot" movement.  Over the years, a variety of individuals and groups have marketed such schemes to anti-government extremists and others. 

More of a loose network than a hierarchical organization, Commonwealth Trust agents operated across the United States.  In the 1990s, Commonwealth Trust agents in Pennsylvania even targeted the Amish and Mennonite communities.  In 2003, one Commonwealth Trust agent from Tennessee, Terry Stewart, received a 175 year prison sentence for a $56 million pyramid scheme.

In 2004, Rebuck began cooperating with federal investigators.  According to defense counsel, Rebuck cooperated on 19 investigations across the country, assisting in the prosecution of over 40 tax protesters.

Rebuck's assistance included testifying at the Pennsylvania trial of John Michael "Red" Crim, who led the Commonwealth Trust Company.  In January 2008, a jury convicted Crim of conspiracy to defraud the IRS; in June, Crim was sentenced to eight years in prison. 

Another tax protester Rebuck helped authorities investigate was actor Wesley Snipes. While testifying at the 2006 tax evasion trial of another Pennsylvania tax protester, Arthur Farnsworth, Rebuck stated that Snipes had purchased a bogus trust from Commonwealth.  In February 2008, a federal jury in Florida convicted Snipes of willfully failing to file tax returns, and in April sentenced him to three years in federal prison.  Snipes is currently free pending his appeal.

At his sentencing the judge ruled that, although Rebuck's cooperation had been "absolutely indispensable" to the government's case and that federal prosecutors requested leniency, Rebuck still deserved to serve some prison time as punishment for his previous actions.

The judge ordered Rebuck to report to prison on October 10, 2008.