Four Colorado Residents Convicted on Conspiracy, False Return, and Tax Evasion Charges in $40M Trust Scheme

A federal jury convicted four Colorado residents of conspiracy to defraud the United States for operating an abusive trust tax evasion scheme that caused approximately $40 million in losses to the United States, the Justice Department announced Tuesday.

Marcia Predmore, Roderick Prescott, Suzanne Thompson and Weldon Wulstein promoted an illegal layered trust tax shelter to hundreds of high-net-worth business owners across the country, according to court documents and evidence presented at trial. The scheme used four trusts—a business trust, family trust, charitable trust and private family foundation—to help clients evade federal income taxes on upwards of 98 percent of their business profits, prosecutors said.

The defendants taught clients to claim tax deductions for non-deductible personal living expenses and fraudulent charitable contributions, the Justice Department said. ” The tax shelter cost between $25,000 and $50,000 to set up. “These defendants were repeatedly warned by attorneys, CPAs, financial professionals, and IRS guidance that this trust-based scheme was illegal, yet they chose to ignore those warnings,” said Amanda Prestegard, special agent in charge of the IRS Criminal Investigation Denver Field Office.

Weldon Wulstein, a CPA, prepared hundreds of false tax returns for clients who purchased the shelter, working in partnership with Suzanne Thompson, who operated a bookkeeping firm and prepared financial statements for the clients’ trusts, according to the Justice Department.

Roderick Prescott, who had previously been convicted of tax evasion and permanently barred from promoting abusive tax shelters, promoted the private family foundation layer of the scheme, teaching clients how to claim deductions for donations to the foundation while maintaining control over those funds for their own personal benefit, prosecutors said.

Marcia Predmore, a registered life insurance agent, promoted the shelter through a business she operated with her spouse, Timothy McPhee.

In December 2025, McPhee was sentenced to 151 months in prison for conspiracy, tax evasion and wire fraud related to his role in the scheme and his operation of a separate multi-million-dollar investment fraud called the ROI Cash Flow Fund, the Justice Department said.

Thompson and Wulstein were each convicted on six additional counts of assisting in the preparation of false tax returns. Predmore was convicted on six counts of tax evasion for her personal use of the same shelter she sold to clients.

All four defendants face a maximum of five years in prison on the conspiracy charge. Sentencing will be determined by a federal district court judge after consideration of federal sentencing guidelines and other statutory factors.

IRS Criminal Investigation is handling the investigation. Pope and Patrick Burns of the Justice Department’s Tax Section are prosecuting the case.