An accountant who took his antigovernment “sovereign citizen” views to work with him is going to prison, and many of his former clients are faced with huge, unpaid tax bills.
Timothy Garrison, 60, of Mount Vernon, Wash., was sentenced Wednesday to 42 months in federal prison and ordered to pay $95,626 in restitution after pleading guilty to two counts of assisting with the filing of false income tax returns.
As an accountant and tax preparer, Garrison prepared federal income tax returns for more than 50 people with false or fraudulent information, resulting in a $2.5 million loss to the U.S. government.
“The defendant’s scheme now creates a hardship for those who put their trust in Mr. Garrison – they have big tax bills to pay,” U.S. Attorney Jenny A. Durkan of the Western District of Washington said after Garrison’s sentencing.
Kenneth J. Hines, the IRS special agent in charge of the Pacific Northwest, also issued a public statement about Garrison’s activities as a sovereign-citizen accountant. “When Americans go to a tax professional, they do not expect to receive faulty tax guidance from someone with a personal agenda,” Hines said.
As a member of a growing number of sovereign citizens who believe they’re above the law, Garrison did more than avoid paying taxes by filing fraudulent tax returns. He was a felon and couldn’t legally possess firearms, but authorities found a 9mm Glock handgun in his home when he was arrested. He also had a badge and called himself a “county ranger,” believing he had the power to arrest police officers and public servants.
Garrison filed bogus liens against the homes – personal property – of law enforcement officers. He was ordered to remove six liens he placed on the properties of public servants in Skagit County in western Washington. “His further abuse of the legal system with fraudulent liens and so-called ‘arrest warrants’ is a dangerous mix for our law enforcement officers who are trying to keep our communities safe,” the U.S. attorney said.
As part of a plea bargain, a federal firearms charge was dismissed against Garrison, who was convicted of mail fraud in 1984. He will be on two years of supervised release – a form of federal parole – when he’s released from prison.
Garrison, who holds an accounting degree from the University of Washington, was treasurer for an antigovernment group in western Washington called the “Sovereign Assemblies” or “Assemblies of the Counties at Large.” Five other sovereign citizen members of that group also were charged in recent months with federal crimes. The group also has ties to the Alaska Peacemaker Militia and its leader, Francis Schaeffer Cox, who awaits trial on murder conspiracy and federal firearms charges.
In December, another member of the Sovereign Assemblies, David Russell Myrland was sentenced to 42 months in federal prison for making threats against the mayor and city attorney of Kirkland, Wash. Four others await trial in western Washington, including Kenneth Wayne Leaming, who is scheduled to be arraigned Friday in U.S. District Court in Seattle on assorted charges, including retaliating against a federal judge.
Garrison, his wife and two other members of the Washington state “assemblies” were “jurors” on a pseudo-legal “court” that found Cox “not guilty” after his arrest last year on charges of plotting to kidnap and kill state troopers and a judge in Alaska.
Garrison also operated a tax preparation business, the 89th Street Management Company, since 1988 from his home in Mount Vernon, and prepared 200 to 400 tax returns annually, court documents say. Between 2004 and 2009, a court document says, 17 of Garrison’s approximately 200 to 300 clients were audited by the IRS “and determined to owe average back taxes in excess of $20,000 per return.”
Garrison’s scheme involved the filing of two sets of tax returns for his clients – a corporate tax return and a personal tax return. The accountant advised his clients to create corporations through which all income was funneled. Some of those individuals apparently were unaware their accountant had filed fraudulent returns on their behalf, according to court documents.
“The individual’s tax return was fraudulent because it declared only, typically, $1,000 per month of income from the corporation when, in fact, the individuals were typically paid much more,” the plea agreement says. “The corporation tax return was fraudulent because it declared false expenses,” it added. “The net result of the individual and corporate tax returns was to facilitate the avoidance of taxes on the individual tax returns.”