Financial adviser gets 27 months for fraud

John David Van Hove, also known as "Johnny Liberty," was sentenced in federal court to 27 months in prison for giving clients schemes to hide income and assets from the Internal Revenue Service.

U.S. District Judge David Ezra also gave Van Hove three years of supervised release and ordered him to pay $400,000 in restitution yesterday after he pleaded guilty to one count of "corruptly endeavoring to obstruct and impede the administration of the tax laws" and one count of wire fraud.

Van Hove operated a financial planning and investment advice business on Maui since 1997 that offered clients various schemes:

» A method in which a person could remove himself from the taxing jurisdiction of the United States.

» Use of "common law trusts" to conceal ownership and control assets and income.

» Use of offshore trusts with related bank accounts in which assets would be repatriated through the use of a debit/credit card.

» International business corporation entities that had no independent business purpose and did not represent ongoing businesses, but in whose names bank accounts were opened in the Bahamas and elsewhere for the purpose of concealing ownership and control of assets and income.

According to court testimony, most of Van Hove's clients lost the entire amount they invested despite his promises of return rates of up to 25 percent a month or 300 percent a year. The investors were from Hawaii, Washington, Arizona and New York.