Taxable Talk

Two months ago I wrote about the owner of Club Vogue (a strip club) in Columbia, Missouri. James Andrew Yaeger, the owner, paid his lap dancers in cash, and didn't report the income. He got caught, and is looking at a term at ClubFed. Yesterday, the General Manager of Club Vogue admitted his part in the scheme.

Dan Marcum earned about $82,000 from Club Vogue in 1999, but didn't file a tax return according to this story. The US Attorney noted he didn't file in 2000 and 2001 either. If you're paid in cash, it's just as much income as if you're paid by a check. Although Marcum faces up to $250,000 in fines and five years in prison, he'll likely receive a short prison term at ClubFed.

While I was in Palm Springs there was more fraud and evasion. In New York, an operator of a trucking company pleaded guilty to evading federal taxes to the tune of $2.5 million. Anthony Guido, of Pelham, New York, took his salary in cash (along with some relatives) for eight years. He'll be spending a bit of time at ClubFed after he's sentenced in 2007. (News story here)

Back in May, we reported on the indictment of the owners of the La Shish restaurants in Michigan. Earlier this week the wife of the owner pleaded guilty to tax evasion. Under her plea agreement, she'll be spending about three years at ClubFed. Her husband is still a fugitive from justice. Elfat El Aouar admitted that she helped to evade about $1.5 million in taxes. (News story here)

Finally, from Pennsylvania comes another story of someone who says that you don't have to pay the income tax. Yeah, right. Arthur Farnsworth of West Rockhill, Pennsylvania was found guilty in Philadelphia of tax evasion after admitting he hadn't filed a tax return. The former Libertarian candidate for Bucks County Commissioner has a web site where he notes his views. Unfortunately for Mr. Farnsworth, the Supreme Court (and all the courts of appeals) has held that you must pay the income tax. Mr. Farnsworth faces up to 15 years at ClubFed and a $750,000 fine when sentenced next year. (News story here)

So the government has taken yet another bite out of crime.

Richard Hatch, the Survivor winner who is now a convicted tax offender, has formally appealed his conviction from earlier this year. The Associated Press reports that Hatch caught the producers of Survivor cheating (they allegedly gave food to other contestants); CBS denies the charges.

In any case, Hatch is now at the Morgantown, West Virginia Federal Correctional Institute, serving a four-year term. Hatch's appeal was filed with the 1st District Court of Appeals in Boston.

Perhaps Hatch is jealous of Wesley Snipes stealing the tax offender spotlight.

The Seventh Circuit Court of Appeals today ruled on the appeal of Glen Murphy, a Wisconsin Chiropractor, who had earlier been convicted of seven counts of filing false tax returns and three counts of not filing tax returns. After being sentenced to 41 months at ClubFed, Mr. Murphy appealed.

Judge Easterbrook gave the unanimous opinion of the Court. Here are some excerpts:

"After being charged, he tried to game the system and drag out the proceeding as long as possible."

"AAA, from what we can tell, offered no legitimate services; it instead specialized in international-scale tax fraud. Murphy, himself no fan of taxes, turned to AAA in 1997 in an effort to dramatically lower his past and future income tax liability. AAA obliged, helping Murphy set up a sham, zero-income partnership that took on huge, predetermined losses in sums perfectly tailored to eliminate Murphy’s present and past tax liability. AAA also served as a conduit for Murphy to direct money to offshore bank accounts under the guise of advertising expenses. As a grand finale, Murphy did not even file income tax returns from 2001-2003, despite telling his bank that he had done so (and even producing a completed 2001 form) as part of a home refinancing application."

"During the 10 months leading up to and including his trial, he employed a pattern of delay and misdirection that would make an NFL offensive coordinator jealous."

"Information not available to the district court at the time, but highly revealing now, is Murphy’s sudden ability to quickly secure paid private counsel within weeks of his convictions."

If you get the idea that Mr. Murphy lost his appeal, you're correct. The ruling by Judge Easterbrook is quite revealing of someone who tried to evade justice, but lost.

Hat Tip: Decision of the Day

VaporTech is a Livermore (California) company that uses steam, vapor, and high pressure to clean toxic soils or increase oil production from old wells. Its CEO used to be John Frances Griffin. I say 'used to be' because Mr. Griffin, already under indictment for mail fraud, has now been charged with two counts of tax evasion.

A federal grand jury in Oakland indicted Mr. Griffin on tax evasion charges last week. Griffin supposedly didn't tell his CFO his social security number, and got paid in cash and cashier's checks to avoid having his income shown. (I will only briefly note that the CFO, who was not identified in the news story, should have his head examined.)

Mr. Griffin is already in a halfway house awaiting trial. He's likely going to be spending some significant time at ClubFed. Additionally, the government has begun forfeiture proceedings against him, and wishes to obtain a gold tennis racket, televisions, and over $17,000 in clothes from Nieman Marcus.

Joe Mammana owns the Yardley Egg Farm in Ohio. He's pledged millions to crack down on criminals. There's just one little problem, according to the U.S. Attorney's Office: Mr. Mammana hasn't paid his own taxes.

The Associated Press reports that Mammana hasn't paid federal taxes since 2000. He's accused of earning over $3 million, owning luxury cars and a luxurious home without paying taxes. He's currently in jail after a search found an unregistered handgun. U.S. Magistrate L. Felipe Restrepo denied bail, calling Mammana a flight risk.

Meanwhile, Mammana is accused by an Ohio crime-fighting group of reneging on his promised reward. The head of that group, Kevin Miles, has sued Mammana after he was attacked with a baseball bat and told during the attack to drop the lawsuit.

This is a story that really speaks for itself. Reverend John Henry Walker of the Macedonia Baptist Church in Charlotte, North Carolina pleaded guilty to nine counts of tax evasion and bank fraud. The Associated Press reported that federal prosecutors told the judge in the case that Walker used a church credit card for, "erectile dysfunction medication and hotel visits with female parishioners." Walker's attorney told the AP that, "...the government's allegations of socially irresponsible behavior regarding Pastor Walker's private life were completely without merit and amounted to just plan dirty litigation."

The story notes that the church congregation will be voting within the next two weeks on whether Walker will be keeping his job.