Jury selection began Monday, and opening arguments were heard Tuesday in the U.S. District Court for Colorado in the case of Marcia Predmore of Estes Park. Predmore is on trial for tax evasion related to an abusive trust scheme, along with codefendants Roderick Prescott, Suzanne Thompson, and Weldon Wulstein.
In a 33-page order issued April 17, U.S. District Judge Regina M. Rodriguez denied most of Predmore’s pretrial efforts to suppress evidence seized from her Estes Park home while ordering prosecutors to turn over any recorded or written statements she made during post-arrest questioning in 2023.
Predmore had asked the court to dismiss the conspiracy charge against her and block testimony from an Internal Revenue Service revenue agent expected to testify about tax-loss calculations.
According to a superseding indictment, the alleged conspiracy operated from February 2018 through September 2023 and involved the promotion, sale, and implementation of trusts and “private family foundations,” prosecutors say, which were used to conceal taxable income from the IRS.
The IRS estimated that $159 million was paid into the tax shelter, and only 2% of the income was paid in taxes, amounting to $45 million in unpaid federal income taxes.
In August, Predmore’s husband and co-defendant, Timothy McPhee, pleaded guilty to conspiracy to defraud the United States, tax evasion, and wire fraud. According to the government, McPhee also operated a Ponzi scheme that involved investing clients’ money in a foreign currency exchange with the promise of a 3% monthly return. Instead, McPhee used the returns to make payouts to prior investors and to fund his own lifestyle.
McPhee was sentenced in December by Rodriguez to 151 months in federal prison for his role in operating the tax fraud and investment scam. He was also ordered to pay $45 million to the Internal Revenue Service and more than $6 million to his clients.
According to the government’s case, Larry Conner of Frisco, Texas, and McPhee marketed the arrangement as a way for business owners to avoid paying federal income taxes on most or all of their business income. Clients were instructed to assign income to a series of sham trusts and a purported private family foundation to create the appearance that the income no longer belonged to them, while still maintaining control and use of the money.
The trusts filed tax returns reporting the income but offset it with improper deductions and charitable donations, reducing tax liability to zero.
Predmore, Prescott, Thompson, and Wulstein were later added as defendants in a superseding indictment returned by a federal grand jury in Denver. Thompson and Wulstein are additionally charged with assisting in the preparation of false tax returns, while Predmore and McPhee also face tax evasion charges tied to their personal use of the alleged shelter.
The government’s case against Conner has been delayed due to a health crisis.
If convicted, Predmore could face up to five years in prison on conspiracy charges. Additional tax-return preparation charges carry potential three-year sentences, and tax evasion counts carry potential five-year prison terms.
Rodriguez denied Predmore’s motion to suppress evidence seized during a September 2023 search of the Estes Park residence she shared with McPhee and ruled that investigators established a sufficient connection between the alleged tax crimes and the residence because the home also served as the business address for Private Banking Concepts and Mountain Solitude LLC, businesses allegedly tied to the scheme.
Court records state Predmore and McPhee co-hosted seminars through their business, Private Banking Concepts, which prosecutors allege promoted and sold the trust-based tax shelter and related financial strategies.
Rodriguez also rejected arguments that the search warrant relied on stale information or was overly broad. The judge found the affidavit described an “ongoing, continuous” enterprise involving trusts, tax filings, and business records that likely would still be maintained at the home.
“The warrant does not ‘encompass virtually every’ record that could be found in the residence or on an electronic device,” Rodriguez wrote, concluding the warrant contained sufficient limitations tied to the alleged federal tax crimes.
The court partially granted Predmore’s separate motion concerning statements she allegedly made after her arrest at Denver International Airport in September 2023. According to the order, Predmore and McPhee were handcuffed upon returning to Denver while federal agents executed a search warrant at their home.
Predmore alleged she was questioned in an interview room without Miranda warnings and that the interaction was not captured on body camera footage or included in reports.
Because prosecutors said they do not intend to use the statements at trial, Rodriguez previously denied the request to suppress them as moot. However, the judge ordered the government to provide any written or recorded statements in its possession, as well as records summarizing oral statements made during interrogation.
Rodriguez also denied Predmore’s request to dismiss Count 1 of the superseding indictment, which charges conspiracy to defraud the United States. Predmore argued the indictment failed to adequately allege that she knowingly joined any conspiracy.
The judge disagreed, finding the indictment contained detailed allegations that Predmore referred prospective clients to co-defendants involved in the trust program, sent promotional materials, and directed clients to bookkeeping and tax-preparation services tied to the alleged shelter.
“To the Court, the Superseding Indictment alleges that Defendant Predmore did more than set out cookies at a seminar,” Rodriguez wrote.
Rodriguez’s order also denied objections to testimony from IRS Revenue Agent Lizeth Maldonado, who is expected to testify about tax returns, bank records, tax-loss calculations, and the movement of funds among defendants and related entities. Rodriguez ruled that much of Maldonado’s testimony qualifies as lay testimony based on her review of records and experience, while allowing expert testimony related to overall tax-loss calculations.
The case, which is being prosecuted by attorneys from the Justice Department’s Tax Division following an investigation by IRS Criminal Investigation, is expected to take six weeks.