ANOTHER TAX EVASION CHARGE - HUGE VICTORY!!!!!!!!!!

[coffeeseven]

http://www.lvrj.com/news/9893062.html

Sep. 20, 2007
Copyright © Las Vegas Review-Journal

Four-month trial ends with no convictions

Federal income tax evasion case involved nine defendants

By JOAN WHITELY
REVIEW-JOURNAL

A criminal tax case alleging income tax evasion and conspiracy dissolved in federal court this week, when a jury returned zero convictions on 161 charges faced by nine defendants.

Monday's verdict "sends a strong message," said defense attorney Lisa Rasmussen, who represented Joel Axberg, a tile layer.

Informally called the Kahre case -- after the primary defendant, local business owner Robert Kahre, who paid workers in gold and silver coins -- the trial lasted four months. It relied heavily on evidence gathered in a controversial armed raid in May 2003 on several of Kahre's local business places. The raid entailed keeping more than 20 workers handcuffed, at gunpoint, in 106-degree heat without shade or water while agents collected records and equipment.

"Yeah, that's a pretty major victory," said defense lawyer William Cohan. "If you go 0 for 160 (in baseball), they'd send you down to the minor leagues."
   
Cohan was upbeat although his client, Kahre, was not acquitted of any of his 109 charges. Rather, the jury hung on all of Kahre's counts.

The jury also hung on all counts faced by Kahre's sister, Lori Kahre, and defendant Alex Loglia.

Four defendants acquitted of all the charges against them were Axberg, Robert Furman, Ron Ruggles, and Kahre's mother, Myra Buonomo.

"It was the most wonderful feeling and the most wonderful day in ages," Buonomo, 66, said of her acquittal. She said she works "more or less as a runner" for her son's construction-related businesses. Part of the case hinged on whether Kahre's workers were employees or independent contractors, who are responsible for paying their own taxes.

Two other defendants, Dannielle Alires and Debra Rosenbaum, were partly acquitted, with the jury hung on one count each.

Before trial, five additional defendants had pleaded guilty.

Michael Kennedy, who defended Lori Kahre, said the case turned on the notion that taxpayers could be wrong without being criminal. He was referring to the fact that his client, Lori Kahre, and other defendants had not paid taxes according to the market value of the precious metal content of the coins in which they were paid, as opposed to their face value. He conceded at trial that his client may owe federal taxes for her mistakes.

The Internal Revenue Service had never before provided guidance on how to handle gold and silver coins that circulate, only on noncirculating collectible coins, according to Kennedy, who is a federal public defender. "If that's the case, we're not going to take someone's liberty from them, on something that a (certified public accountant) with a master's degree doesn't even know. That's a scary country, and I don't live in that country."

J. Gregory Damm, the assistant U.S. attorney who led the prosecution, declined to say whether the government will retry any of the five defendants on the charges that resulted in a hung jury. Damm referred the newspaper to Natalie Collins, public affairs specialist for the U.S. attorney's office in Las Vegas.

Acting U.S. Attorney Steven W. Myhre issued a statement through Collins that thanked jurors, investigators and prosecutors. "Ultimately, the responsibility lies with the jury to decide whether the government met its burden of proof in the case and we accept their decision." He said the office will "soon decide" whether to retry any defendants.

Jurors got stuck on the question of whether the government had proved defendants intentionally violated tax law, according to David Ramirez, jury foreman. "Oh my God, the willfulness is very hard to prove, as we found out," Ramirez, 49, said Wednesday. "That was the hard part, especially in the conspiracy charge." Ramirez works in management for the U.S. Postal Service.

The government "did not present one witness who agreed with the conspiracy theory," said attorney Joel Hansen, who defended Loglia. Currently unemployed, Loglia did paralegal work for Kahre.

The jurors favoring acquittal varied by defendant, Ramirez said. "Personally, I went guilty (on some counts) and some, not guilty." He said when the 12 jurors split on a count, it was usually a 6-6 or 7-5 split.

Ramirez said the prosecuting team had a clear, although silent, reaction to the verdict: "The head was hanging down, the shoulders were low." He said "shocked" was the term some prosecutors used to describe themselves when they talked to him after the trial.

Cohan did not want Robert Kahre, who testified during the trial, to talk to reporters after the trial because his client and five others still face additional charges in a separate criminal tax case set for trial in January. That case alleges Kahre hid assets by having relatives or friends buy property in their names using his funds.

Once the criminal cases are over, Kahre will pursue related civil actions he has filed against several parties, including federal prosecutor Damm, Internal Revenue Service agents and North Las Vegas police officers who had roles in the raid or indictment process.
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[J’raxis 270145]

Unfortunately this looks like another one of those "good-faith mistake of law" acquittals—that is, they're still going to end up owing income tax, it's just that they won't be convicted of willful tax evasion because they genuinely believed they didn't owe any tax.

[coffeeseven]

Unfortunately this looks like another one of those "good-faith mistake of law" acquittals—that is, they're still going to end up owing income tax, it's just that they won't be convicted of willful tax evasion because they genuinely believed they didn't owe any tax.

He conceded at trial that his client may owe federal taxes for her mistakes.

Emphasis mine

Dumb lawyer. Never the less....

...when a jury returned zero convictions on 161 charges faced by nine defendants.

Don't be so jaded. It's still a win.

[coffeeseven]

Maybe the federal government should get their own affairs in order. Or can we expect an armed standoff at every one of the no-filer's houses?

http://www.wtop.com/?nid=428&sid=1034585

Federal Workers Owe Billions in Unpaid Taxes
January 17, 2007 - 10:26am
Mark Segraves, WTOP Radio

WASHINGTON - As the 2006 tax season approaches, the federal government is still trying to recover nearly $3 billion from its own employees who failed to file income tax returns for 2005.

More than 450,000 active and retired federal employees did not voluntarily comply with federal income tax requirements for the 2005 tax year, according to documents obtained by WTOP through the Freedom of Information Act. (See Excel spreadsheets in the Related Links below.)

The total balance owed is $2,799,950,165.

The documents show that every federal agency has employees who failed to comply with federal tax laws.

Seventy-one employees in the Executive Office of the President, which includes the White House, owe $664,527 in taxes for 2005. About 20 of those employees have entered into an IRS payment plan, bringing the EOP balance down to $455,881owed by 50 employees.

The White House did not respond to repeated requests for comment.

In fact, about one third of the delinquent employees, or 149,500, entered into a payment plan, but the total owed is still more than $2 billion.

At the IRS, employees can be fired for failure to pay federal income taxes. But an IRS spokesperson tells WTOP it's no easier to collect from federal employees than it is to collect from the general public.

In the past, IRS officials have been quick to compare the federal workers' rate of compliance with the general public's. But this year, the IRS is not able to track the compliance rate for the general public. The percentage of federal employees who still owe back taxes for the 2005 year is 3.3 percent of the workforce including retirees.

The federal agency with the highest number of delinquent taxpayers is the United States Postal Service, where 56,652 employees owe more than $320 million. So far, about 22,000 of those employees have agreed to a payment plan.

A spokesperson for the Postal Service says the agency hopes all of its employees follow the law, but will leave enforcement to the IRS.

The agency with the best compliance rate is the Department of Treasury, which includes the IRS. Fewer than 2 percent of Treasury employees failed to pay their taxes. About 3,000 Treasury employees owed $13,489,683 -- 1,437 of those feds also have made payment plans.

The IRS tracks the compliance rate of federal employees each year in an effort to increase compliance. Agency directors are made aware of their department's compliance rate and then memos are sent to staff encouraging them to file their taxes.

(Copyright 2007 by WTOP Radio. All Rights Reserved.)
Mark Segraves, WTOP Radio

WASHINGTON - As the 2006 tax season approaches, the federal government is still trying to recover nearly $3 billion from its own employees who failed to file income tax returns for 2005.

More than 450,000 active and retired federal employees did not voluntarily comply with federal income tax requirements for the 2005 tax year, according to documents obtained by WTOP through the Freedom of Information Act. (See Excel spreadsheets in the Related Links below.)

The total balance owed is $2,799,950,165.

The documents show that every federal agency has employees who failed to comply with federal tax laws.

Seventy-one employees in the Executive Office of the President, which includes the White House, owe $664,527 in taxes for 2005. About 20 of those employees have entered into an IRS payment plan, bringing the EOP balance down to $455,881owed by 50 employees.

The White House did not respond to repeated requests for comment.

In fact, about one third of the delinquent employees, or 149,500, entered into a payment plan, but the total owed is still more than $2 billion.

At the IRS, employees can be fired for failure to pay federal income taxes. But an IRS spokesperson tells WTOP it's no easier to collect from federal employees than it is to collect from the general public.

In the past, IRS officials have been quick to compare the federal workers' rate of compliance with the general public's. But this year, the IRS is not able to track the compliance rate for the general public. The percentage of federal employees who still owe back taxes for the 2005 year is 3.3 percent of the workforce including retirees.

The federal agency with the highest number of delinquent taxpayers is the United States Postal Service, where 56,652 employees owe more than $320 million. So far, about 22,000 of those employees have agreed to a payment plan.

A spokesperson for the Postal Service says the agency hopes all of its employees follow the law, but will leave enforcement to the IRS.

The agency with the best compliance rate is the Department of Treasury, which includes the IRS. Fewer than 2 percent of Treasury employees failed to pay their taxes. About 3,000 Treasury employees owed $13,489,683 -- 1,437 of those feds also have made payment plans.

The IRS tracks the compliance rate of federal employees each year in an effort to increase compliance. Agency directors are made aware of their department's compliance rate and then memos are sent to staff encouraging them to file their taxes.

(Copyright 2007 by WTOP Radio. All Rights Reserved.)

[mvpel]

If the US government doesn't think that this current issue legal tender coin:



... is worth $50, then they shouldn't put the words "FIFTY DOLLARS" on it.

[Recumbent ReCycler]

If the US government doesn't think that this current issue legal tender coin:



... is worth $50, then they shouldn't put the words "FIFTY DOLLARS" on it.

Yeah, I never understood why they would make a coin from metal that is worth a lot more than the face value at the time it was made, then sell it for more than the metal is worth.

[Nat F]

Yeah, I never understood why they would make a coin from metal that is worth a lot more than the face value at the time it was made, then sell it for more than the metal is worth.

It's pretty simple if you use "bureaucrat logic".  They don't want any denomination of FRNs (or coins) in values larger than $100.  That makes it much harder to transport or hide large amounts of money.  Therefore if they make coins have a face value it must be $100 or less.  However the government also recognizes that there is a significant demand for PM rounds.  They could market rounds with no face value, but to distinguish (and add value) to government rounds they put a token value on them to make them appear to have the authority of FRNs (since many people consider FRNs to be the "real" money).

Since the bureaucrats have the power of government behind them they also decree that PM based rounds don't count for their printed value, but instead their precious metal value.  It doesn't have to make sense, it just has to come from their authority.  Logical thought is a rare thing from bureaucrats.

-Nat

[mvpel]

[Ruger Mason]

If the US government doesn't think that this current issue legal tender coin:



... is worth $50, then they shouldn't put the words "FIFTY DOLLARS" on it.

According to the IRS's argument then, every American who doesn't report their copper pennies as being worth 2 cents, or their nickels as being worth 7 cents are tax evaders!

http://www.coinflation.com

But is the reverse true?  If I ask my employer to pay me in Sacajawea dollars, can I only report 6 cents of each to the IRS?

The IRS:  Pure, naked evil!

[mvpel]

If the US government doesn't think that this current issue legal tender coin:



... is worth $50, then they shouldn't put the words "FIFTY DOLLARS" on it.

According to the IRS's argument then, every American who doesn't report their copper pennies as being worth 2 cents, or their nickels as being worth 7 cents are tax evaders!

http://www.coinflation.com

+1 - Thanks for that site!  I was thinking about putting together something similar about 4-5 years ago, should have put some more time into it instead of doing a one-off calculation in Excel to win a Usenet argument.

And aside from that, it's a really excellent point.

[Pat McCotter]

And here we go again!

Employer's gold, silver payroll standard may bring hard time
'This is a case about money, greed and fraud'

By JOAN WHITELY
LAS VEGAS REVIEW-JOURNAL

Robert Kahre, who owns numerous construction businesses in Las Vegas, is standing trial on 57 counts of income tax evasion, tax fraud and criminal conspiracy. If convicted on most counts, he could live out his life in prison.

But attorney William Cohan paints Kahre as an American "hero" who believes his payroll system helped keep the U.S. monetary system sound, and was also a form of legal tax avoidance.
   
A self-made entrepreneur, Kahre, 48, paid his workers in gold and silver coin, and said they could go by the coins' face value -- rather than the much higher market value of their precious metal content -- for federal tax purposes. He did not withhold taxes from their wages, and he provided the same payroll system to 35 outside clients, which were other local businesses.

Judge David Ezra is presiding over the criminal trial, which began May 19 in U.S. District Court. Joining Kahre as defendants are his longtime girlfriend, a sister who works in his businesses, and a former business assistant.

Three of the four present defendants were among the nine people tried on similar charges two years ago, but no convictions resulted. In the 2007 trial, four others of the nine defendants, including Kahre's mother, were entirely acquitted. Two individuals were only partially acquitted, but dropped from the indictment that forms the basis for the trial before Ezra.

This time around, the only new defendant is Danille Cline, Kahre's girlfriend of 19 years, and the stay-at-home mother of his four children. The government claims she obstructed the Internal Revenue Service by allowing Kahre to place several homes in her name, thus attempting to conceal his assets.

Cline's former brother-in-law, Thomas Browne, also was indicted this time, for his role as broker in some of the real estate transactions, but has since reached a plea bargain. He is expected to testify against the defendants.

"This is a case about money, greed and fraud." The line appeared on screen in court during the government's opening statement by Christopher Maietta, a trial lawyer from the Washington, D.C., office of the Department of Justice.

According to the government, Kahre and others concocted a fraudulent cash payroll "scheme" and then peddled it to other Las Vegas contractors. Defendants did not report to the IRS any payments made to workers, "either at the true amount or at the bogus amount, ... being the face value of the coin or coins," according to the indictment.

The now-suspended payroll service handled about $114 million over six years, according to court records. Between 17 and 25 percent of that went to Kahre or his workers; the rest went to the 35 client businesses to pay their workers, court records show.

The government did not indict most of the outside businesses or their personnel as co-conspirators with Kahre; although on May 6, Daniel McCartan of Action Concrete, which was one of Kahre's payroll clients, was finally sentenced in connection with a plea agreement reached in December 2006. McCartan received five months in prison and five months of home detention for one count of tax evasion.

Kahre contends his workers had agreed to be independent contractors, so he did not have to withhold taxes for them. His six businesses are in the trades of painting, drywall, tiling, plumbing, heating-cooling and electrical work.

Further, the $50 gold coins and the silver dollars Kahre used for payroll are designated by Congress as legal tender, so people are entitled to value them at their stamped denominations, he also contends. Taken at face value, each defendant's annual coin income placed him below the threshold for filing a federal tax return.

Earlier cases on the question of how to value gold or silver coins have focused on collectible coins that had been pulled from circulation but still have value as property, according to the defense. Kahre used coins minted after 1985, which are allowed to circulate.

"It's not whether what Mr. Kahre did was legal under the law," defense attorney Michael Kennedy told the jury in his opening statement. "It's whether he believed what he did was legal," in the absence of explicit instructions by the IRS -- on its Web site, in its publications or in response to written correspondence from Kahre -- on how to value post-1985 gold or silver coins.

"We're not here to determine if moneys are owed," said Kennedy on behalf of his client, Lori Kahre, who had relied on her brother's tax theory. A tax mistake is different from a tax crime, so the IRS can still use administrative channels to force the defendants to pay back taxes, Kennedy has noted in the past.

A sincere, but mistaken understanding of the tax-filing process is different from adopting a "pretextual" belief system in order to dodge taxes, Ezra acknowledged in court Wednesday.

Cohan described Kahre's payroll system as a "boycott of the Federal Reserve." But when the lawyer attempted to elaborate on Kahre's view that the nation has debased its paper currency by abandoning its former gold standard, Ezra added, "We're not here to convince the jury that the ... (U.S.) monetary system belongs to an international cabal."

[John Edward Mercier]

I thought they looked at this.
The outcome was that the workers must be paid in US silver and gold coin with a face value at least minimum wage.
And that the workers when selling the coins for more than face value must claim capital gains.

Or is this a whole new case?

[Pat McCotter]

This is a new trial with new charges.

NEW JUDGE, TRIAL AND INDICTMENT
Tax case defendant wins rare ruling

By JOAN WHITELY
REVIEW-JOURNAL
Aug. 11, 2008



Robert Kahre -- a Las Vegas businessman charged with federal tax crimes that could put him in prison for the rest of his life -- gets a new judge for his second go-round, thanks to a maneuver rarely successful for criminal defendants in federal court.

The defense recently won a writ of mandamus from the 9th U.S. Circuit Court of Appeals. Defense lawyers argued that Judge Robert Jones was stepping on Kahre's right to legal representation when the judge decided Kahre could not hire Lisa Rasmussen as an additional attorney for his next trial.

The appeals court also ordered the case reassigned and erased a contempt finding that Jones had made during the first trial against Kahre's first lawyer, William Cohan, who continues to represent him.

Prosecutors argued before the appeals court, unsuccessfully, that Rasmussen had a conflict of interest representing Kahre because in the earlier trial she had represented Joel Axberg, a co-defendant who was acquitted.

A year ago, prosecutors tried Kahre and eight other defendants on 161 counts of breaking tax laws but came away with zero convictions.

The next trial is not a retrial of those charges but a new trial on a "new" indictment -- the latest in a series of seven indictments -- that came out in November.

Kahre is one of five defendants in the next trial.

The court here has not yet assigned a new judge because the appeals court just granted the writ on Friday. Judges Kent Dawson, Lloyd George and James Mahan already have recused themselves from the case.

Also facing trial are Kahre's wife, Danille Cline; Kahre's sister, Lori Kahre, who worked in his office; Alex Loglia, who did paralegal work for him; and Thomas Browne, a real estate agent and loan officer who helped with several purchases of property.

The government thinks Kahre bought the properties in the name of relatives to hide his assets.

Such writs are rare, particularly for the defense side, said Washington, D.C., attorney Christopher Landau.

"They grant it very sparingly," he said. "There has to be a clear error, and the petitioner has to show that the injury is immediate and irreparable."

Landau heads appellate litigation for Kirkland & Ellis, a nationally known law firm. Writs of mandamus are more common in state courts, he added.

The Kahre case revolves around whether Kahre and his workers willfully evaded taxes by agreeing to be paid in gold and silver coins.

The individuals then each determined they did not need to pay any taxes because adding up the face values of the coins received per year fell below the threshold for filing a tax return.

Also, Kahre did not withhold taxes for the workers because he contends they are independent contractors.

In the first trial, the court told the jury that taxpayers need to account for coin income by the fair-market value of the precious metal content.

The defense acknowledged that Kahre and others might be forced to pay taxes owed but contended their mistakes were not intentional, nor criminal.

The federal government is alleging Kahre undervalued gold and silver coins. But the government accepted such coins at face value -- issuing no change back -- when defendants have paid filing fees at federal court in Las Vegas using a mix of gold and silver coins plus paper dollars, according to several affidavits.

The U.S. attorney's office in Las Vegas wouldn't comment on the 9th Circuit's sending the Kahre case back to be heard by a new judge.

Judge Jones also declined to comment on the reassignment. But in court on March 10, Jones had invited defendants to request his removal from the case with their request for a writ of mandamus.

[John Edward Mercier]

So are they trying to convict him of tax evasion... or conspiracy to defraud?

[Pat McCotter]

Yes...I don't know...ummm...

I really can't tell from the two articles and I could not find "mainstream media" outlets writing/telling about it.