< Back to Previous Page

North Carolina Bankruptcy Court Permanatly Bars Telemarketing Firm “National Audit Defense Network” From Selling Tax Scams And Preparing Tax Returns

Justice Department to Obtain NADN's Claimed 640,000-Person Customer List;
NADN’s Tax Scams Have Allegedly Cost U.S. Treasury $324 Million

WASHINGTON, D.C. - The Department of Justice announced today that on June 9 a federal bankruptcy court in North Carolina entered a permanent injunction against Las Vegas-based telemarketing firm National Audit Defense Network, known as NADN. The injunction order, submitted jointly by NADN’s bankruptcy trustee and by the Justice Department, prohibits NADN from selling abusive tax schemes and from preparing federal income tax returns. The order also gives the Justice Department “full and complete access” to NADN’s records, including customer information.

NADN’s earlier court papers acknowledged that the company’s database had more than 640,000 customers. Court papers filed by the United States estimate that customers who followed NADN’s tax advice have underpaid $324 million in federal income taxes over the past three years alone. NADN ceased operating on May 27, 2004, and filed a petition to liquidate its operations under Chapter 7 of the bankruptcy code.

The Justice Department, in cooperation with the bankruptcy trustee, William Leonard, Jr., and the Internal Revenue Service, intends to contact NADN’s customers who purchased NADN’s tax schemes or to whom NADN may have given false tax advice. This communication will inform the customers of the entry of the permanent injunction and provide information about amending tax returns containing erroneous NADN-initiated credits and deductions.

“Shutting down a tax scam promotion prevents further harm to the tax system. But it is only step one,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “In the next steps, the Department of Justice and the Internal Revenue Service will seek to repair the harm by following the scam to its users and seeking to recover the losses it caused to the federal treasury.”

The Justice Department continues to seek permanent injunctions against ten other defendants in this suit: Weston Coolidge, NADN’s former president; Al Rodrigues, NADN’s former general manager; Robert Bennington, NADN’s former owner; Adam Mangabang, a former NADN sales manager; Christine Reid, a former NADN employee; Mary Orie, NADN’s former return-preparation department manager; ALR, Inc., operating as Success Matrix Group; Lee Panelli; Ric Klingenberg; and Jeff Klingenberg. The other six defendants named in the lawsuit, Oryan Management and Financial Services, Robert Goetsch, Daniel Porter, Joseph Prokop, Michelle Herandez, and ADA Adventure, Inc., agreed to a permanent injunction, which was entered by a North Caolina federal court on May 7, 2004.

Review Your Case With A Bankruptcy Lawyer Now Get your bankruptcy legal questions answered. Contact our Bankruptcy lawyer in your area. You have legal rights. Protect & find out the laws for your assets and money.