Florida Financial Advisor Pleads Guilty to Illegal Tax Shelter

Stephen T. Mellinger III, a financial advisor from Florida, pleaded guilty to promoting an illegal tax shelter scheme and stealing client funds, the Justice Department announced Wednesday.

According to the DOJ, Mellinger orchestrated a nearly decade-long scheme to promote an illegal tax shelter, enabling clients to claim false tax deductions for “royalty payments” to fraudulently reduce their taxes. He and co-conspirators helped clients prepare tax returns claiming over $106 million in false deductions, causing a $37 million tax loss to the Internal Revenue Service.

Additionally, Mellinger and a relative stole over $2.1 million from clients under investigation after learning ...