Man gets time served in IRS illegal trusts case

A Las Vegas man who pleaded guilty to one count of corrupt interference with Internal Revenue Service laws avoided additional time behind bars at his sentencing this week.

U.S. District Judge Philip Pro gave James Dilullo, 65, credit for the 11 months he spent in custody and on house arrest after he was charged.

Pro also placed him on one year of supervised release.

Federal prosecutors did not oppose giving Dilullo credit for time served.

Prosecutors previously alleged that Dilullo assisted in promoting and selling trusts and trust packages that fraudulently eliminated taxable income. He also helped his clients prepare false trust and individual income tax returns.

When the IRS began to examine the trusts, prosecutors alleged, Dilullo told his clients that the federal agency did not have the authority to investigate the trusts and that the clients should not cooperate with the investigation.

Dilullo promoted the tax scheme in Nevada, California, Colorado, Kansas, Iowa, Texas, Washington and West Virginia. Authorities estimated that the scheme cost the U.S. Treasury more than $2.25 million.