Source: United States Attorneys General
A Colorado dentist was sentenced yesterday to 41 months in prison for tax evasion related to his use of an illegal tax shelter.
The following is according to court documents and statements made in court: since 2014, Ryan Ulibarri owned and operated Ulibarri Family Dentistry in Fort Collins, Colorado. In 2016, Ulibarri purchased an abusive-trust tax shelter for $50,000. The tax shelter involved concealing income and creating false tax deductions through the use of a so-called business trust, family trust, charitable trust and a private family foundation, all of which Ulibarri created and controlled. From 2016 through 2023, Ulibarri used this tax shelter to conceal from the IRS over $5 million in income he earned from his dental practice and evade more than $1.6 million in federal and state income taxes owed on that income.
To set up the tax shelter, Ulibarri signed trust instruments that named him as trustee of the three trusts and foundation, and he opened bank accounts in the name of each entity. He further recruited friends to falsely sign his trust instruments as the purported creators of the trusts to make it seem as if Ulibarri himself was not the real creator. Ulibarri then transferred majority ownership of his dental practice to his business trust. He did this despite having been warned by attorneys and CPAs that, in Colorado, a trust could not own a dental practice.
Ulibarri then transferred over $5 million in income he earned from his dental practice into the bank accounts of the various trusts and foundation to create the illusion that the funds belonged to those entities, not him. In reality, Ulibarri retained complete control over those funds and used the funds to pay for personal expenses including his home mortgage, credit card bills, boats, luxury vacations, and professional baseball season tickets. Ulibarri also filed false tax returns for himself, his dental practice, the trusts, and his foundation that falsely reported the income he earned from his dental practice as income of the trusts. On those tax returns, Ulibarri also claimed fraudulent deductions for his personal living expenses which he disguised as trust expenses and charitable donations.
In total, Ulibarri caused a tax loss to the United States of $1.6 million.
In addition to the term of imprisonment, U.S. District Judge Nina Y. Wang ordered Ulibarri to serve 3 years of supervised release, to pay a $150,000 fine and to pay $1,449,121 in restitution to the IRS and $166,966 in restitution to the Colorado Department of Revenue.
Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Special Agent in Charge Amanda Prestegard of IRS Criminal Investigation’s Denver Field Office made the announcement.
IRS Criminal Investigation investigated the case.
Trial Attorneys Amanda R. Scott and Lauren K. Pope and Assistant Chief Andrew J. Kameros of the Tax Division prosecuted the case.