Conspiracy charges dropped in tax case

By Pamela Manson

The Salt Lake Tribune

Conspiracy charges have been dismissed against a lawyer and a businessman accused of defrauding the federal government out of taxes.

U.S. District Judge Clark Waddoups on Tuesday threw out four conspiracy charges each against lawyer David Eugene Ross II and Patrick Merrill Brody.

The only charge remaining in the case is one count of failure to file a tax return against Brody. Waddoups in April dismissed four money-laundering counts against each defendant because they were filed too late.

The prosecution of Brody and Ross is related to the operation of their financial services firm Merrill Scott & Associates in Salt Lake City.

An indictment issued in 2008 alleges the firm tried to attract wealthy customers by claiming to legally cut income taxes under "master financial plans." Those plans allegedly generated only the illusion of mortgage, charity and other deductible expenses by cycling customer funds through a maze of bank and brokerage accounts.

The scheme was conducted from about July 1998 to April 2002, the indictment claims.

In Tuesday's decision, Waddoups said prosecutors applied to suspend time limits for filing the money-laundering counts too late.

The application was filed three months after the Belize government had sent documents about the defendants' alleged activities in that country to the United States, Waddoups said. But, the judge said, the law requires that an application be made while at