The Justice Department on Friday sued Roger Stone, the loyal former advisor to ex-President Donald Trump, claiming he and his wife owe nearly $ 2 million in unpaid federal taxes and other fees.
The lawsuit accuses Stone and Nydia Stone of using an “alter ego” business to “protect their personal income from forced collection and fund a lavish lifestyle.”
The civil lawsuit also accuses the Stones of “trying to defraud the United States” by fraudulently transferring money used to buy their home.
Stone, 68, a longtime Republican politician, was pardoned by Trump in December after being convicted of lying by Congress.
The DOJ’s complaint filed in federal court in South Florida alleges Stone and his wife underpaid their income taxes for five consecutive years in 2007 and 2011. The Stones owe $ 1,590,361.89, including interest and penalties for late payments, according to the complaint.
The lawsuit also alleges Stone failed to pay his full tax bill in 2018 when he filed separately from his spouse. He owes income taxes, interest and penalties of $ 407,036.84 for that year, the complaint said.
“Despite the termination and demand for payment, Roger and Nydia Stone failed and refused to pay the full amount of the debt they owed,” claims the DOJ.
Stone did not immediately respond to an email asking for comment on the lawsuit.
The complaint alleges that by using a Delaware limited liability company called Drake Ventures, the Stones “escaped and thwarted the collection efforts of the IRS.” The company is so dominated and controlled “by the family” that it does not exist as an independent entity, “claims the DOJ.
Drake Ventures has no website or phone number, all members are part of Stone’s family, and its address is the same as the Stone’s home in Fort Lauderdale, Florida, the complaint states.
“The Stones used Drake Ventures’ bank accounts to pay a significant portion of their personal expenses, including groceries, dental bills, spas, salons, clothing and restaurant expenses,” the complaint said.
They paid more than $ 500,000 of their personal tax liabilities through Drake Ventures’ bank accounts in 2018 and 2019 and used the company to pay Stone employees and relatives without providing proper documentation, the DOJ claims.
“The Stones used Drake Ventures for an improper purpose and harmed the United States,” the complaint read. “They used Drake Ventures to receive payments to be made to Roger Stone personally, pay their personal expenses, shield their assets and avoid reporting taxable income to the IRS.”
The DOJ’s lawsuit also accuses the Stones of fraudulently broking their home through a revocable Florida trust they set up, the Bertran Trust.
The Stones had signed a deal with the IRS in May 2017 to pay $ 19,485 a month for their unpaid taxes, the complaint said.
After Stone was charged in January 2019, his family started the Bertran Trust and bought their home on his behalf. In doing so, she used money they had transferred from Drake Ventures to that company to make a down payment of $ 140,000.
In March 2019, the Stones failed to make their monthly payment to the IRS, causing the agency to cancel the installment payment plan.
“The Stones intended to defraud the United States by keeping their assets in the accounts of Drake Ventures, which they fully control, and using those assets to purchase the Stone Residence on behalf of the Bertran Trust,” the complaint said.
The DOJ says “numerous scam badges” marked the purchase. The complaint alleges that the Stones are insolvent and “unable to pay their debts”. face the risk of litigation; and in the expectation that the IRS would “resort to enforced recovery of their unpaid tax liabilities once they defaulted on their monthly installments”.