Phoenix, Arizona - A fugitive and former Hillsboro, Oregon, tax fraud promoter, who had been on the run since he was supposed to start serving a 10 year prison sentence, was caught in Arizona and apprehended on November 1, 2019, by the U.S. Marshals Service, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
Winston Shrout, 70, was convicted by a jury in April 2017 of submitting fraudulent financial instruments to banks and the U.S. Treasury, and failing to file income tax returns. According to the evidence presented at his trial and sentencing, from approximately 2008 through 2015, Shrout created and submitted more than 300 such fraudulent instruments. He also held seminars and private meetings to promote and market the use of these instruments to pay off debts, including federal taxes. Shrout sold recordings of his seminars, templates for fraudulent financial instruments and other materials through his website.
In addition, Shrout did not file his 2009 through 2014 tax returns despite earning substantial income from seminars, licensing fees associated with the sale of his products, and annual pension payments. Shrout admitted during trial that he had not paid income tax for at least 20 years.
On October 22, 2018, Judge Robert E. Jones sentenced Shrout to 10 years in prison, to serve five years of supervised release, and to pay restitution to the IRS. Shrout failed to report to prison as ordered in March 2019, and was a fugitive until his arrest late last week. Shrout appeared in district court and will be transferred to the custody of the Bureau of Prisons to begin serving his prison term.
Principal Deputy Assistant Attorney General Zuckerman commended the diligent investigation of the U.S. Marshals Service in Portland, Oregon, and Phoenix, Arizona, for bringing Shrout to justice. Principal Deputy Assistant Attorney General Zuckerman also commended special agents of IRS–Criminal Investigation, who conducted the investigation, Trial Attorneys Stuart Wexler and Lee Langston of the Tax Division, who prosecuted the case, the U.S. Attorney’s Office for the District of Oregon, and Assistant United States Attorney Ryan Bounds, for their support during the investigation, prosecution, and apprehension of the defendant in this case.