A Las Vegas businessman who used nominee companies in Bermuda and the Cayman Islands to avoid taxes was convicted last Friday on four counts of tax evasion relating to returns filed in the 1990s.

According to the Las Vegas Business Press, government lawyers accused Garth Kloehn of making phoney deductions on the corporate tax returns of his medical device manufacturing firm Kloehn Co.

The money, which was directed to nominee companies in Bermuda and the Cayman Islands to cover fictitious marketing expenses in Europe, was actually returned to the US and used to purchase land in Las Vegas to build custom homes and build a new factory for the Kloehn Company.

The Kloehn Company underreported its taxable income for 1995 and 1996 by over $850,000, according to the newspaper report. The jury also found that Kloehn failed to report income he received from a limited partnership that owned the new factory valued at $4.4 million.

William Archer, an accountant from Anaheim, California, pleaded guilty to one count of tax evasion for helping Mr. Kloehn in his scheme. Mr. Kloehn is scheduled to be sentenced in March and faces a maximum sentence of 20 years in prison and a fine of $1 million.