'Patriot' Pyramid Scheme Founder Arrested in Central America

The co-founder of the Institute for Global Prosperity, a gigantic, U.S.-based pyramid scheme that used the bizarre language and theories of tax protesters and the antigovernment "Patriot" movement, was arrested on federal warrants in Panama last January and extradited back to the United States to face trial.

David Alan Struckman of Renton, Wash., was charged in 2004 along with four other principals of Global Prosperity, which sold audiotapes, CDs and tickets to offshore seminars on "wealth-building" and federal tax avoidance. The others have all since pleaded guilty to tax charges and were to be sentenced this spring.

Struckman faces charges of conspiracy to defraud the United States and tax evasion, and could get up to 20 years in prison and a $1 million fine if convicted.

The indictment alleges that from 1996 until the spring of 2002, Global Prosperity held seminars promoting bogus trust packages and similar schemes that advocated fraudulent methods of eliminating income tax liability. Its principals allegedly earned more than $40 million from its marketing of these "wealth-building" schemes, part of a pyramid structure that rewarded those at the very top but virtually never paid out to those who came into the group later.

The defendants allegedly concealed their income using bogus trusts, offshore bank accounts and other methods. Much of their language, including their tax theories, hearkened back to Patriot conspiracy theories about the Federal Reserve Board, the role of gold in the market, and the illegality of income taxes.

"I've heard all the lectures about not having to pay your credit card debt and money not being backed by gold and the Federal Bank being an imaginary thing," wrote "Jackie," whose boyfriend was involved in the group, on keithlynch.net, a website with the stories of many victims. "I am so afraid, because he's lost so much money already. ... Can anyone help me before he loses even more?"