Quatloos! > Investment Fraud > Offshore Planning > EXHIBIT: Jerome Schneider > Tax Shelter Guru Pleads Guilty

Tax shelter guru's partner pleads guilty, will testify

By Josh Richman
STAFF WRITER

Tuesday, January 21, 2003 - A Los Angeles lawyer has pleaded guilty to his role in a tax-evasion conspiracy and will testify against his alleged partner in crime, a sometime Bay Area man who claims to be "the world's leading authority on offshore banking and investing."

The plea bargain Eric Witmeyer, 48, took last week will probably put him in federal prison for up to a year, rather than the decades he might've faced had he been convicted of all the counts on which he was indicted last month.

In return, he'll cooperate with federal prosecutors, providing testimony and materials in the ongoing case against Jerome Schneider, 51, who has homes in Mill Valley and Vancouver, British Columbia.

Witmeyer admitted he and Schnei-der, who has been praised by the likes of House Energy and Commerce Committee chairman Bill Tauzin, ran a scheme from January 1994 to Decem-ber 2001 in which they offered for sale the stock of Nauru trading corporations licensed as international banks and other offshore corporations. Nauru is an island nation north of the Solomon Islands in the Pacific Ocean.

The two men allegedly took steps to conceal the U.S. investors' ownership of the offshore entities so they could avoid paying taxes on any money those entities made or on any money they earned here but hid there.

Investors allegedly paid Schneider from $15,000 to $60,000 to buy interests in the offshore businesses, and then paid Witmeyer about $15,000 to "decontrol," or mask their role.

Schneider allegedly marketed the sale of these offshore entities at workshops he called "Offshore Wealth Summits" held in places such as Vancou-ver; Cancun, Mexico; and Hawaii. At these workshops, Schneider presented speakers "such as Congressmen, politicians, public figures and others who did not speak about the purchase of offshore entities but who were presented by Schneider as speakers to impress the attendees," the indictment says; it doesn't name those speakers.

Schneider's Web site, which describes him as "the world's leading authority on offshore banking and inves-ting," includes a quote from Tauzin, R-Louisiana, describing the 2000 edition of Schneider's "Complete Guide to Offshore Money Havens" as "A serious contender for the best book on offshore banking I've ever seen."

ABC News in 2001 reported Tauzin had spoken at one of Schneider's seminars in Canada. In that report, Tauzin said he went as part of his campaign to repeal the income tax altogether, not to endorse Schneider's schemes. Asked if he regretted going, he answered, "Knowing what I know, yeah, of course."

Witmeyer pleaded guilty to one conspiracy count; Schneider still faces the same, plus 14 counts of wire fraud and eight counts of mail fraud. Each count is punishable by up to five years in federal prison and a $250,000 fine.

; fraud convictions could require paying restitution, too.

Witmeyer's sentencing is scheduled for June 13, but he has agreed with prosecutors to request delays until his cooperation is finished.

Contact Josh Richman at jrichman@angnewspapers.com .

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