Renaissance backers dismiss probe

Topeka Capital-Journal, The, Oct 13, 2000 by Jonna Lorenz Capital-Journal

Marketing agency helps clients

avoid taxes.

By JONNA LORENZ

The Capital-Journal

A federal investigation of Renaissance, The Tax People, hasn't swayed the confidence of many independent sales representatives associated with the company.

"My take on this is that anything that grows as fast as this and is as innovative as this is going to get a lot of scrutiny," said Kingsley Barham, of Delray Beach, Fla., who is one of about 30,000 independent marketing associates for the company.

Search warrants were served by agents of the Internal Revenue Service and the United States Postal Inspection Service on Wednesday at two locations of the business, which is a multilevel marketing agency aimed at helping clients avoid taxes.

"There is no magic about it, but it is skillfully put together --- and that doesn't mean it's illegal," said David L.C. Van Gorp, an independent certified public accountant who is authorized by Renaissance to provide tax services. "I just don't believe that we're looking at massive fraud on the public. I just don't believe it."

Calls to Michael Cooper, Renaissance president and chief executive officer, on Thursday were referred to his attorney, John Ambrosio, who declined comment.

"I think lawyers who discuss their cases in the press should be put up against the wall and shot," Ambrosio said.

A memo sent from Cooper to independent marketing associates said federal agents seized records, marketing materials, computers, databases, products and compensation plans. The memo, which was provided to The Topeka Capital-Journal by company associates, said the company isn't out of business but will be unable to conduct business while the investigation is in progress.

"There are literally thousands of people that today are on hold," Barham said. "Their lives professionally, personally are on hold. They are taking a long weekend with no pay, and on Monday, they are all praying that the United States government comes to its senses."

Company conference calls, which are operated throughout the day to provide information about the company, continued as normal Thursday.

A response posted on the company's Web site reads: "TheTaxPeople.net (TTP) was alarmed by the search of our offices this October 11, 2000. However, we are cooperating with the federal authorities to provide all documents and information requested. We welcome this investigation, since we believe it will lead to a vindication of our products and services and reveal the ethics and professionalism of our business practices. We are reassured by the fact that no charges have been filed, and we look forward to a candid discussion with the agencies involved."

The Capital-Journal received dozens of calls and e-mails from across the nation Thursday from Renaissance distributors seeking information about the investigation or voicing support for the company.

Renaissance associates sell a tax relief system that has clients set up a home-based business. Clients put family members to work and deduct many daily expenses as business expenses.

"I believe it's totally legal, and I believe the United States government is not harmed in any way by allowing individuals to run a home-based business and affording them these same opportunities of corporate tax benefits that enure to large corporations," Barham said. "I also believe that the tax code that makes these deductions legal has been on the books since 1954. It basically could have been done 46 years ago.

"The fact that it wasn't done until three years ago does not make this strategy a scam or an abusive tax shelter. It creates an opportunity and a huge one. Progress delayed should not be progress denied."

He said he found out about the federal investigation Wednesday night when he called in on a company conference call.

Jonna Lorenz can be reached at

(785) 295-1294 or jlorenz@cjonline.com.

"There is no magic about it, but it is skillfully put together --- and that doesn't mean it's illegal."

--- DAVID L.C. VAN GORP,

an independent

certified public accountant

See PROBE, page 3-C

Probe

Michael Cooper