‘Survivor’ Winner Indicted for Tax Evasion

A federal grand jury in Rhode Island has charged Richard Hatch, the first winner of the reality television show Survivor, with a 10-count indictment that includes fraud and tax evasion. Prosecutors allege that Hatch tried to evade paying taxes on the $1,010,000 he won on the television show in 2000.

According to the indictment, Hatch hired two separate accounting firms to do his 2000 taxes. One estimated that he owed $441,501 in taxes, the other $234,807. Hatch did not file either return. Instead, he filed a return that did not include the more than $1 million TV prize.

The grand jury also alleges that Hatch used money earmarked as charitable contributions to pay for personal expenses. In fact, Hatch allegedly used for personal expenses a $10,000 prize he won for charity on the TV show The Weakest Link, the indictment alleges.

If convicted, Hatch faces up to five years and a $250,000 fine on each count.

Real Estate Agent Admits to Tax Evasion

A real estate agent in Bellevue, Wash., has pleaded guilty to failing to file a personal income tax return for the year 1999.

David Francis Smith, 55, who worked for REMax Eastside Brokers Inc., also admitted that he had failed to file his income tax returns for the calendar years 1998 through 2001. During these years, he had earned substantial sales commissions: $97,974 in 1998, $155,855 in 1999, $112,460 in 2000, and $123,454.95 in 2001.

Smith acknowledged that during the years in question, he used a variation on his actual Social Security number on various real estate forms. Smith also did not maintain a checking or savings account and routinely cashed his commission checks and conducted his financial dealings using cash or money orders.

If convicted, Smith faces up to one year in prison and a fine of up to $100,000.

Adult Store Owner Guilty of Tax Charge

The owner of an adult bookstore in Fort Worth, Texas, has received three years of probation after pleading guilty to filing a false tax return.

Marion Jack McElroy admitted that he filed a false tax return for calendar year 1999. McElroy pocked $15,600 in employment income from his adult bookstore and did not file the income on his personal income tax return for that year.

McElroy’s charge is part of a larger investigation into adult bookstores in the Dallas-Fort Worth area. In March 2005, a federal grand jury in Dallas charged several other people in a 23-count indictment on racketeering, obscenity and tax charges related to the operations of dozens of video arcades featuring obscene materials.

Gun Store Owner Pleads Guilty to Tax Evasion

Brian D. Borgelt, 41, of Lakewood, Wash., the former co-owner of Bull’s Eye Shooters Supply in Tacoma, has pleaded guilty failing to file a federal tax return. Borgelt pleaded guilty to the major count of an indictment charging him with failing to file tax returns between 1997 and 2001.

Bull’s Eye Shooters Supply gained national notoriety in 2002 when the Bushmaster rifle involved in the D.C. sniper case was linked to the store. Lee Malvo, one of two men convicted of murder in the case, told investigators he had stolen the rifle from the Tacoma store.

The Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) inspections at the store had revealed problems with required paperwork tracking the disposition of firearms. The U.S. Attorney’s Office determined there were no viable federal firearms charges that could be pursued against Borgelt. Federal authorities have revoked Borgelt's federal firearms license.

As part of the plea agreement, Borgelt has agreed to pay back taxes, penalties and interest for all the counts alleged in the indictment, a total of $230,884.

He faces up to one year in prison and a fine of up to $100,000.

Memphis Man Sentenced in Tax Scheme

A Memphis, Tenn., man has been sentenced to 37 months in prison for his role in an illegal tax scheme.

Stephen Brown, 44, pleaded guilty to one count of conspiracy to defraud the United States and two counts of filing false claims. According to statements during the plea hearing, Brown and his brother, Tommie Brown Jr., devised a scheme to help themselves and others obtain fraudulent income tax refunds by filing false 1999 tax returns.

The Browns recruited individuals to file the false returns, then created false W-2s containing fraudulent wages and federal tax withholding amounts. In all, the Browns submitted a total of 14 tax returns, claiming $80,946.17 in fraudulent refunds from the government.

“Taxpayers are reminded that filing a false tax return is a crime,” stated IRS Special Agent in Charge Cleve Daniels. “There are individuals in our community promoting these types of tax schemes. Don’t fall victim to them. Identifying and combating tax schemes is one of our highest priorities.”

Calif. Resident Pleads Guilty to Tax Evasion

Jose J. Ramirez, 53, of Sacramento, Calif., has pleaded guilty to one count of tax evasion.

According to Assistant U.S. Attorney John K. Vincent, who prosecuted the case, Ramirez admitted to evading taxes by filing a false federal income tax return for tax year 1998. He also admitted to filing false federal tax returns for tax years 1997 and 1999, as well as false state tax returns for tax years 1997 and 1998. The total tax loss amounted to approximately $90,000 to $100,000.

Ramirez faces up to five years in prison, a three-year period of supervised release and a fine of up to $250,000.

Mo. Man Sentenced On Tax Charge

Phillip Morris, 56, was sentenced to four years of probation and six months of home detention. Morris previously pleaded guilty to making false statements on his federal income tax return by significantly understating his total taxable income.

On the return, Morris reported that a total taxable income of negative $28,177, an adjusted gross income of $28,299 and a total taxable income of $0. In truth, however, Morris’ total taxable income for 2000 was $119,151.18 and the tax due was $40,890.

Ala. Man Sentenced For False Tax Return

William Curtis Havens, 50, of Mobile, Ala., was sentenced on charges of subscribing to a false federal income tax return. Havens was sentenced to 18 months in federal prison, a one-year term of supervised release after he serves his prison sentence, and a $100 special assessment. Havens failed to report about $213,000 in income on his 1998 to 2002 income tax returns.