When Tax Strategies Cross the Line: Lessons from a Colorado Dentist’s $5M Tax Evasion Case

Earlier this month, a dentist in northern Colorado was sentenced to more than three years in prison for participating in a multi-million dollar tax evasion scheme. The case offers a stark reminder to dental professionals: when it comes to tax planning, not all strategies are legal—or safe.

The Case: Trusts, Foundations, and Fraud

Dr. Ryan Ulibarri, owner of Ulibarri Family Dentistry in Fort Collins, purchased an abusive-trust tax shelter in 2016 and used it to conceal over $5 million in income from the IRS. He created and controlled three trusts and a foundation, named himself as trustee, and opened bank accounts in their names.

To disguise his role, he even recruited friends to falsely sign documents as the creators of the trusts. Despite being warned by attorneys and CPAs that Colorado law prohibits a trust from owning a dental practice, Ulibarri moved forward anyway—transferring majority ownership of his practice into one of the trusts.

From there, Ulibarri funneled business income into the trust and foundation accounts to make it appear the money didn’t belong to him. He then used those funds for personal expenses like mortgage payments, luxury vacations, credit card bills, boats, and even professional baseball season tickets. In addition, he filed false tax returns for himself, his business, and the trusts, falsely deducting personal expenses and disguising them as charitable donations or business-related costs.

In total, he evaded more than $1.6 million in federal and state income taxes. Now, he’s been sentenced to 41 months in prison, ordered to pay over $1.6 million in restitution, and will serve three years of supervised release—not to mention the long-term damage to his professional reputation.

The Warning: Not All Tax Strategies Are Created Equal

At DrillDown Solution, we regularly hear questions from clients about using trusts, foundations, or other complex structures to reduce taxes. And while strategic tax planning is an essential part of running a dental practice, there’s a fine line between being proactive and being reckless.

In this case, Dr. Ulibarri’s actions went well beyond aggressive planning. He created entities purely for concealment, misrepresented their purpose, and used them to personally benefit while avoiding his tax obligations. This wasn’t creative accounting—it was fraud.

What Dental Professionals Should Know

1. Complex doesn’t always mean compliant.
Just because a strategy involves legal-sounding tools like “trusts” or “foundations” doesn’t mean it’s legitimate. If a structure is being used to disguise ownership or income, it’s a red flag.

2. Legal tax strategies do exist.
There are plenty of compliant, effective ways to reduce your tax burden: entity structuring, retirement contributions, depreciation strategies, income splitting, and more. The key is implementing them properly—with full transparency and documentation.

3. Trust your gut—and your advisors.
If someone promises you major tax savings through a structure you don’t fully understand—or if they downplay the risks—it’s worth seeking a second opinion. DrillDown’s team works exclusively with dental professionals and can help evaluate whether a strategy is sound or suspect.

The Bottom Line

Tax planning should never put your practice, license, or freedom at risk. The story of Dr. Ulibarri is a cautionary tale of what happens when shortcuts and schemes replace sound, legal strategy.

At DrillDown Solution, we’re committed to helping dentists make smart financial decisions—grounded in the law and backed by experience. If you have questions about trusts, tax shelters, or any advanced planning strategy, we’re here to help you get clarity and confidence.