The attorney for a Twin Cities businessman accused of evading more than $13 million in income taxes on Wednesday called a recent federal indictment of his client "an unprecedented abuse of power."
A federal grand jury last week returned a 13-count indictment against Scott Phillip Flynn, 54, that included charges of conspiracy to defraud the government, tax evasion and filing false tax returns. The indictment, signed by Assistant U.S. Attorney David MacLaughlin, accused Flynn of hiding millions of shares of stock that he obtained under other people's names and concealing roughly $50 million in income and capital gains from the IRS as part of an alleged conspiracy that ran from 2005 to 2011.
Flynn's late father, Phillip J. Flynn, was also named in the indictment as having participated in the conspiracy by "pretending to own and control" sham companies that his son used to carry out his scheme. While living at a $2.7 million Orono home under an alleged sham mortgage, Scott Flynn also listed his father's Plymouth address on tax returns to conceal his ownership of the home from 2007 to 2011, the indictment says.
But Flynn's attorney, Earl Gray, said Wednesday that Phillip Flynn "relying on expert estate planners, lawyers, and accountants, created an estate plan and trust for his family." Phillip Flynn died in July 2014.
"Instead of civilly contesting the nontax liability of the estate plan, the government in an unprecedented abuse of power has indicted my client for crimes he did not commit," Gray said. "At the trial we will establish my client's innocence and at the same time prove that the estate plan created by his father and experts was certainly not a criminal estate plan."
A spokesman for the U.S. attorney's office said the indictment "described a criminal tax evasion scheme, and we are confident a jury will understand how that is different from a legitimate estate plan."
Stephen Montemayor • 612-673-1755 Twitter: @smontemayor
