An Estes Park man pled guilty on Thursday to defrauding the U.S. government of nearly $45 million using an illegal tax shelter.

Timothy McPhee faces a maximum total sentence of up to 30 years in prison for promoting a fraudulent tax shelter made up of a private family foundation and three separate trusts to taxpayers across the country, the U.S. Department of Justice said in a news release Friday. He also pled guilty to tax evasion and wire fraud.

McPhee taught clients who bought the shelter how to use the trusts and foundation to avoid paying federal income taxes on their income from 2018 through 2023, the release says.

His instructions told clients to assign their business income to the trusts, making it seem like the income belonged to them, the release says. Those who followed his advice only paid taxes on about 2% of their income, but the income going to the trusts was taxable to the clients themselves, per IRS guidance.

McPhee knew his instructions violated IRS guidelines and he ignored warnings from accountants and attorneys who told him the shelter was fraudulent, he admitted during his plea, according to the release. He also used the shelter to conceal his own finances and did not pay nearly $2 million in federal income taxes from 2016 through 2021.

The defendant also promoted a fraudulent investment scheme from 2023 through 2024, saying it was an opportunity for investors to earn a 3% monthly payout on their principal investment, the release says. In total, investors sent more than $8 million to bank accounts he controlled.

He didn’t send their funds to a third-party borrower to participate in foreign exchanging currency trading like he promised, instead using some investor funds to make 3% monthly payouts to other investors and spending other funds on his own personal expenses, according to the release.

McPhee will be sentenced on Oct. 23, the release says. He faces a maximum penalty of five years in prison for conspiring to defraud the U.S., a maximum penalty of five years in prison for tax evasion and a maximum penalty of 20 yeras in prison for wire fraud.