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Father, son ordered to pay $1.8 million for tax fraud

SIOUX FALLS -- A man who claimed he didn't have to pay income taxes because he believes God owns his money was ordered to pay more than $1.8 million for tax fraud from 2002 to 2013.

SIOUX FALLS - A man who claimed he didn't have to pay income taxes because he believes God owns his money was ordered to pay more than $1.8 million for tax fraud from 2002 to 2013.

Ted Nelson and his son, Steven Nelson, of Letcher, were sentenced Monday at the United States District Court building in Sioux Falls, nearly 11 months after a jury found the men guilty of conspiracy to defraud the United States, several counts of failure to file an income tax return and one count of impeding the Internal Revenue Service.

Judge Karen Schreier ordered the men to pay total restitution of $1,842,102.14 "jointly and severally," which means both men are responsible for paying the total. They could divide the bill among themselves, or one party could pay all of it.

Ted Nelson was sentenced to five years in prison and three years of supervised release and was ordered to pay $250 in special assessments.

Steven Nelson was sentenced to one year and one day in prison and three years of supervised release and was also ordered to pay $250 in special assessments.

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During the jury trial, which concluded on May 12, 2015, Ted Nelson claimed he was not subject to U.S. law and was not obligated to pay taxes because God, not Nelson, owns his money.

The Nelsons' tax evasion scheme began in 2002 when they claimed to be members of a sovereign group called the Pembina Nation Little Shell Band of North America that doesn't recognize U.S. laws. An indictment, filed on July 9, 2013, said the pair formed 39 trusts, corporations, LLCs and other entities to avoid taxation.

Steven Nelson did not use the sovereignty defense and filed a motion to sever his case from his father, which was denied.

Ted Nelson was sentenced to 60 months in prison for conspiracy to defraud the United States. He was sentenced to 12 months in prison for seven counts of failure to file an income tax return and 10 months for impeding the Internal Revenue Service, all served concurrently, or at the same time.

Steven Nelson was sentenced to 12 months and one day in prison for conspiracy to defraud the United States. He was sentenced to 12 months for eight counts of failure to file an income tax return and for impeding the Internal Revenue Service, all served concurrently.

The court approved a motion to allow Steven Nelson to travel to the jail on his own accord on April 18.

Related Topics: CRIME
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