12/06/06

Actor Wesley Snipes has been arrested by police in Orlando, Fla., on charges he avoided paying $12 million in tax.

The 44-year-old actor handed himself over to cops, almost two months after he was indicted while shooting movie "Gallowwalker" in Namibia.

The Internal Revenue Service has reportedly been investigating Snipes for the past four years -- but the star claims he has been targeted because his celebrity attracts public interest, and in actual fact he is the victim in the case.

He recently told an Orlando newspaper, "It appears I'm to be the scapegoat, because there's more public interest in celebrities gone bad than rich people being taken advantage of.

"I will abide by the law, seek the protections the law affords me and, as always, seek the advice of competent council in an effort to resolve this issue.

"I'm not running, I'm not a fugitive, despite the misrepresentations in the press." 

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Wesley Snipes

[ Open Letter to Wesley Snipes ]

Wesley Snipes - Troubled Actor Asks For Prayer

Jan 14, 2008 

Wesley Snipes is hoping to bolster his legal team with a little help from the man upstairs.

Before facing the 138-member all-white jury pool for his tax-dodging trial Monday, Snipes joined in a prayer service at a local church in Ocala, Florida. The service was organized on his behalf by 22 pastors and attended by 150 friends and supporters, per the Orlando Sentinel.

"We just prayed for favor, fairness and deliverance," Frank Thompson, an Orlando-based minister, told the newspaper.

Afterward, Snipes—dressed in a blue suit and accompanied by a phalanx of lawyers—turned up at the federal courthouse in Ocala and watched as potential jurors were quizzed about their impartiality in what is turning out to be the biggest tax fraud trial in years.

The 45-year-old actor stands accused of trying to cheat the Internal Revenue Service out of $12 million in fraudulent refunds in 1996 and 1997 and not filing any tax returns from 1999 to 2004. If he's convicted, he could face up to 16 years in federal lockup. Snipes has pleaded not guilty to all counts.

Snipes had tried to stall the trial, filing motions arguing that he couldn't get a fair shake in Ocala and requesting the trial be moved to New York. But a federal appeals court shot down the petitions last week.

As the proceedings got underway, Snipes' defense team reportedly ticked off a list of potential celebrities who may be called as character witnesses, including filmmakers Spike Lee (who directed Snipes in Jungle Fever) and Gus Van Sant, former costars Woody Harrelson (White Men Can't Jump) and Goldie Hawn (Wildcats), news personalities Tom Brokaw and Barbara Walters and Muhammad Ali.

Opening arguments are slated to begin Tuesday, with Team Snipes expected to argue that Snipes didn't think he was required to pay federal income taxes on millions he made from his movies due to "unscrupulous" tax advice from his two codefendants, both known tax protesters.

Prosecutors claim the erstwhile Demolition Man knowingly sought to avoid paying up with the help of two Florida men—Eddie Ray Kahn, founder of the 1990s organization American Rights Litigators and later the Guiding Light of God Ministries who has previous tax fraud convictions; and Douglas Rosile, a former certified public accountant for Kahn whose licenses were yanked in Ohio and Florida.

Both face similar charges and could get up to 10 years in prison. They too have pleaded not guilty.

"Not too many people are successful on a tax-protester argument. It's rare," Jim Rodio, a partner at Holland and Knight's Private Weath Practice and a former federal prosecutor of high-profile tax cases, told E! Online. "You really have to be able to convince a jury that you just didn't know."

Per the indictment, Snipes entered into an agreement with Kahn and Rosile in 2000 to use American Rights Litigator's system to protect millions of dollars he banked between 1998 and 2004, when he was on fire at the box office with his Blade trilogy. ARL based its strategy on a discredited tax-avoidance scheme known as the 861 position.

"I think he's going to have a tough time putting forth the argument that he didn't know that these amounts weren't taxable," said Rodio. "For him to believe that, he's got to believe everybody's income in the U.S. is not taxable. That's a tough burden and he'll need a jury nullification."

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Wesley Snipes

[ Open Letter to Wesley Snipes ]

Wesley Snipes Sentenced to Three Years in Prison

April 24, 2008

OCALA, Fla. - Wesley Snipes was sentenced to three years in prison on tax charges Thursday, a victory for prosecutors who sought to make an example of the action star by aggressively pursuing the maximum penalty. 

Snipes' lawyers had spent much of the day in court offering dozens of letters from family members, friends — even fellow actors Woody Harrelson and Denzel Washington — attesting to the good character of the "Blade" star and asking for leniency. They argued he should get only probation because his three convictions were all misdemeanors and the actor had no previous criminal record.

But U.S. District Judge William Terrell Hodges said Snipes exhibited a "history of contempt over a period of time" for U.S. tax laws, and granted prosecutors the three year sentence they requested — one year for each of Snipes' convictions of willfully failing to file a tax return.

"In my mind these are serious crimes, albeit misdemeanors," Hodges said.

Snipes apologized while reading from a written statement for his "costly mistakes," but never mentioned the word taxes.

"I am an idealistic, naive, passionate, truth-seeking, spiritually motivated artist, unschooled in the science of law and finance," Snipes said.

Snipes said his wealth and celebrity attracted "wolves and jackals like flies are attracted to meat." He called himself "well-intentioned, but miseducated."

Snipes was the highest-profile criminal tax target in years, and prosecutors called for a heavy sentence to deter others from trying to obstruct the IRS. The government alleged Snipes made at least $13.8 million for the years in question and owed $2.7 million in back taxes.

Snipes was acquitted in February of five additional charges, including felony tax fraud and conspiracy. Snipes' co-defendants, Douglas P. Rosile and Eddie Ray Kahn, were convicted on both those counts. Kahn, who refused to defend himself in court, was sentenced to 10 years, while Rosile received 54 months. Both will serve three years of supervised release. Snipes will serve one year of supervised release.

Snipes and Rosile remain free and will be notified when they are to surrender to authorities.

Kahn was the founder of American Rights Litigators, and a successor group, Guiding Light of God Ministries, that purported to help members legally avoid paying taxes. Rosile, a former accountant who lost his licenses in Ohio and Florida, prepared Snipes' paperwork.

Snipes maintained in a years-long battle with the IRS he did not have to pay taxes, using fringe arguments common to "tax protesters" who say the government has no legal right to collect. After joining Kahn's group, the government said Snipes instructed his employees to stop paying their own taxes and sought $11 million in 1996 and 1997 taxes he legally paid.

Prosecutors sought to justify the maximum sentence by raising those and other details from the IRS investigation, as well as a tax loss even for years in which Snipes was acquitted of failing to file a return. Such "relevant conduct" is allowed by law for a judge's consideration at sentencing.

Criminal tax prosecutions are relatively rare — usually the cases are handled in civil court, where the government has a lower burden of proof. Prosecutors said Snipes' case was important to send a message to would-be tax protesters not to test the government.

[ Open Letter to Wesley Snipes ]

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