Judge Gives 10-Year Prison Term to Organizer of Bogus Tax Shelters

Times Staff Writer

A Huntington Beach tax adviser who orchestrated a bogus, multimillion-dollar tax shelter scheme drew a 10-year prison term Thursday, maintaining until the end that he didn’t realize that he was doing anything wrong.

“I should have known better. I didn’t,” 68-year-old Charles D. Spurrier told a federal judge just before his sentence. “I’m just what I say I am--just an ordinary guy who can’t see how I got myself into this.”

But U.S. District Judge J. Spencer Letts drew a different portrait of the gray-haired Mormon as about four dozen relatives of Spurrier and his six co-defendants in the tax scheme listened in silence in a Santa Ana courtroom.

“These crimes are heinous crimes,” Letts declared as he railed against what he described as a tolerance on the part of some judges to white-collar crime.


On the one hand, the judge said, “this was a scheme calculated to help criminals achieve their objective without criminal risk.” On the other, he added, Spurrier duped “gullible victims” who believed that they were joining a legitimate tax-shelter program.

Spurrier was convicted by a federal jury in December of tax evasion, fraud and helping others file false income statements.

With associates in his Trust Management Group, Spurrier attracted 5,800 people into bogus and illegal tax shelters. One of his major operations took in $11.2 million in clients’ income, then returned $10.1 million of that total in nontaxable “gifts” and kept a fee for the company.

Spurrier maintained throughout his trial that he did not realize what he was doing was illegal and pointed as a defense to his deep religious beliefs. He and his attorney, William A. Dougherty, maintained that Spurrier was convinced of his operation’s legitimacy by the teachings of the Church of Jesus Christ of Latter-day Saints.


But the jury did not believe him. Spurrier faces a maximum possible sentence of 39 years in prison and a $50,000 fine.

Letts handed out a sentence that fell short of the maximum but exceeded the recommendation of probation officials. He declined to impose a fine against the now-penniless Spurrier to go along with his 10-year prison term.

The six other family members and associates implicated in the tax scheme each received lesser sentences, ranging from a month in jail to several years in prison.

Federal prosecutor John C. Belcher said he found Letts’ sentence to be fair but somewhat lenient--especially in light of the sharp rebuke against white-collar crime delivered by the judge just before sentencing.

“He prepared everybody for very tough sentences, but it didn’t really end up that way,” Belcher said.

Spurrier, who remained free on bond, said in an interview after the judge’s decision: “I think it’s a fair sentence. I expected to do better, but I have no complaints. I’m not discouraged, and I’m not frightened.”

Earlier, in a pre-sentencing statement to the judge, Spurrier continued to claim innocence, but added: “I’m not pleading for mercy or anything else.”

Letts said he would give him none, adding that crimes in pursuit of money are among the most dangerous to society.


Of the defendants’ assertions that they were ignorant of their wrongdoing, the judge said, “It is not uncommon for people committing a fraud to have a very high capability for self-delusion, as well as the ability to defraud others.”

Also sentenced Thursday on a variety of tax-fraud-related charges were: Spurrier’s son, Dennis C. Spurrier, 34, to 3 years in prison and 5 years’ probation; Spurrier’s nephew Wayne Hill, 34, to 30 days in jail, 5 years’ probation, a $2,000 fine and community service, and Spurrier’s nephew Leon G. Hill, 44, to 3 years in prison, 5 years’ probation and an $8,000 fine.

Also sentenced were Thomas R. Smith, 37, who was given 6 months in prison and 5 years’ probation; Hyrum J. Amundsen, 75, given 3 years in prison and 3 years’ probation, and Amundsen’s wife, Eva, 64, given 30 days in jail, 5 years on probation and community service.

All the defendants remained free on bond pending appeals.

In taking the case to a higher court, defense lawyers plan to argue, in part, that the prosecution was tainted by information that one juror gained from outside the trial.