Durham executive sentenced for not paying taxes

A Durham executive was sentenced to prison last week for hiding nearly $1 million in income to avoid paying federal taxes.

Ronald Cruickshank, 60, was sentenced in federal court by Chief U.S. District Judge Louise W. Flanagan to nearly three years in prison and three years of probation.

Cruickshank pleaded guilty June 12 to three counts of tax evasion relating to his 2001, 2003 and 2004 federal tax obligations. Cruickshank, a successful business executive, was paid more than $900,000 during those years but hid the money in various bank accounts to avoid paying income taxes, prosecutors said.

In 2002, Cruickshank worked as an executive at a Raleigh advertising company, Howard Merrill Partners, and was paid nearly $300,000 in taxable income, prosecutors said.

In 2003, Cruickshank became chief executive officer of a sock manufacturer, Thor Lo Inc., and was paid nearly $260,000.

In 2004, he received nearly $400,000 in taxable income from his job and other investments, prosecutors said.

Rather than report his income to the Internal Revenue Service, as required by law, he paid American Legal Research Institute/American Debt Eliminator to help him hide his income, prosecutors said.

American Legal Research Institute/American Debt Eliminator, which was operated by Robert Pelletier and Laszlo Horvath, presented seminars in the Raleigh area and sold illegal tax shelters to help people evade their tax obligations, prosecutors said.

Both Pelletier and Horvath have been convicted of federal charges in connection with their illegal activities, prosecutors said.

Using techniques he learned from Pelletier and Horvath, Cruickshank arranged for his executive salary to be paid to nominee trusts. He opened bank accounts for such trusts in his mother-in-law's name. Then he used the money in the bank accounts to pay personal expenses, prosecutors said.

During the course of the prosecution, Cruickshank retained the services of “tax avoidance” groups in Florida, Arkansas, Arizona, and California and attempted to obstruct the government's investigation, prosecutors said.