Richard Hatch found guilty of tax evasion

[mailin 0]

Just cause you win a million dollars doesn't make you any smarter I guess

http://www.projo.com/digitalbulletin/content/projo-20060125-hatchverdict.396bc056.html

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PROVIDENCE -- Survivor star Richard Hatch's strategy didn't quite pay off today, as a jury found him guilty of two tax-evasion counts and one count of filing a false return.
It cleared him of seven other counts, including a bank-fraud charge carrying the most severe penalty. But he was ordered held as a flight risk and led out of court in handcuffs. He faces sentencing on April 28.

Hatch reacted somewhat stoicly to the verdict, nodding his head as each finding was read. As a court officer went to put on the cuffs, he calmly held out his hands, motioning with them to ask whether they should be in front or back.

Hatch had contended with relentless heat, hunger and physical exhaustion to avoid being voted off the island by his fellow "tribe" members and win the first season of the popular reality TV series Survivor six years ago. But the burly Newport resident couldn't outlast a dogged effort by the U.S. government to go after taxes on Hatch's $1 million prize and other income.

The jury returned its mixed verdict early this afternoon after about six hours of deliberations and a two-week trial that once again exposed the 44-year-old self-described "fat, naked guy" to national attention.

Chief U.S. District Judge Ernest C. Torres then revoked Hatch's bail, based on the prosecution's contention that Hatch was a flight risk because he owns property in Canada, has a domestic partner who is an Argentinian national and because all of the money he won cannot be accounted for.

One of Hatch's lawyers, John MacDonald, said they were disappointed with the verdict and will file an appeal immediately.

Douglas Bricker, special agent in charge of criminal investigation in the IRS's Boston field office, called the trial "an example of the IRS's commitment to enforce tax laws."

The 10-count indictment last Sept. 8 had alleged Hatch failed to pay taxes on that money, as well as income from a radio program, rental income and charitable donations he allegedly used for himself.

Prosecutors showed that Hatch neglected to file two tax returns prepared by different accountants, reporting his Survivor winnings and showing that he owed several hundred thousand dollars in taxes.

Instead, Hatch filed a third return that didn't include his income from Survivor, a return Hatch asked an accountant to prepare for comparison purposes.

Prosecutor Andrew Reich charged in his closing argument that "greed" was Hatch's motivation for avoiding his tax responsibility, but Hatch's attorney, Christopher Minns, argued that Hatch is an honest man who made a mistake.

Testifying last week, Hatch claimed that he always intended to pay taxes on his Survivor winnings, but he thought that at least some of the taxes had been paid by CBS, its corporate parent of the show's producer.

He said he tried repeatedly without success to get an answer to that question.

"I just didn't want to pay them if they had already been paid," Hatch testified.

"Has it ever been your intention to violate the tax laws of the United States," his attorney asked.

"It has not," Hatch answered.

The jury apparently didn't buy it.

Hatch, the son of a Newport lobsterman, gained notoriety for winning the first Survivor by "outwitting," "outlasting" and "outplaying" his 15 fellow contestants on the Borneo island of Pulau Tiga and winning the $1 million prize in front of more than 50 million viewers on CBS.

Hatch, who asked jurors to call him "Rich," was shrewd and ruthless in his approach to Survivor. A burly man who is openly gay, Hatch often competed naked, a strategy that helped him gain fame and seemed part of a strategy to psyche out his fellow competitors.

But Hatch and his attorney Christopher Minns, tried portraying a more sensitive, naive Rhode Islander to the jurors.

Minns blamed his client's tax problems on his bad bookkeeping skills. He pointed out his mother, sister and committed partner to the jurors. Hatch testified about his troubled childhood and the important role his adoptive son plays in his life.

On the witness stand, Hatch claimed that he had put $350,000 of his Survivor winnings to cover taxes, but that an investment firm had embezzled the money. He said he didn't sue the firm because "I didn't care. It wasn't a priority."

Shown a copy of his statement from the investment firm, Hatch said it was difficult for him determine what the statement showed as his balance.

Hatch said that he didn't report his Survivor income because he thought somebody from CBS, Viacom or producer Mark Burnett's Survivor Entertainment Group might have paid it. He said he repeatedly tried without luck to get an answer, but Burnett would not return his calls.

Start of tax troubles

Hatch's tax troubles began in November 2002 when he filed a 2000 tax return that didn't include Survivor income, although his accountant had told him not to file that return.

The accountant, Jodi Rodrigues Wallis, had completed a return for Hatch that included the Survivor income and determining that Hatch owed $234,800, but Hatch approached her later and asked her to fill out a return without the Survivor income for comparison purposes. Rodrigues Wallis testified that she complied with Hatch's request, but stressed to him that he could not file the return.

"It was just for analysis," said Rodrigues Wallis. She said she took her name off the sample return and had Hatch sign a letter from her stating, "This return is not intended to be filed and is simply for your information."

Months later, Rodrigues Wallis learned from Hatch that he had filed that comparison return. It resulted in him claiming a refund of $4,483 instead of the $234,800 she had determined he owed. It also prompted an audit notice from the IRS.

Hatch had apparently shopped around for the best tax return that he could get for the year 2000. Even before approaching Rodrigues Wallis, he asked a Newport accountant, Richard Plotkin, to complete his 2000 tax return. In November 2001, Plotkin produced a return for Hatch that included the $1,010,000 he received for Survivor, and concluded that Hatch owed $374,831 in taxes, along with $66,670 in interest and penalties.

Prosecutors claimed that Hatch never filed that return.

History of the charges

Hatch's tax problems became public knowledge back in January of 2005 when the U.S. Attorney's Office in Providence announced that Hatch had been charged via criminal information with two counts of filing a false tax return.
Digital Extra

Hatch signed an agreement before that announcement indicating he would plead guilty. Each of the two counts carried a maximum penalty of five years in federal prison and a $250,000 fine. As part of the deal, the U.S. Attorney's Office said it would recommend a sentence that is in the minimum range under federal sentencing guidelines.

But in March of 2005, Hatch walked away from the agreement, the U.S. Attorney's Office withdrew the charges and U.S. Attorney Robert Clark Corrente announced that prosecutors would bring Hatch's case before a grand jury seeking an indictment on "all possible charges."

Hatch later said that he walked away from the deal because he isn't guilty. He said that, as part of the deal, the U.S. Attorney's Office wanted him to serve two years in prison.

Hatch claimed that the case had become personal for the U.S. Attorney's Office when he walked away from the plea agreement, a claim that Corrente denied, saying, "It's not about personality. This is about evidence."

The grand jury returned an indictment six months later, charging Hatch with 10 counts: two counts of tax evasion, one count of filing a false S-Corporation income tax return, two counts of wire fraud, four counts of mail fraud and one count of bank fraud.

The grand jury alleged that Hatch failed to report about $1,037,000 from Survivor in 2000 and 2001, including a Pontiac Aztec valued at $27,074 that was given to him as part of his prize.

It also alleged that Hatch failed to report $326,540 that Entercom, Boston, LLC paid him in 2001 for appearances on The Wilde Show, a radio program on WQSX-FM; $28,104 in rental income in 2000 and 2001 from his property at 21 Annandale Rd., Newport; and $36,500 in charitable donations to Horizon Bound.

Prosecutors claimed that Hatch used for personal expenses donations to Horizon Bound, a charity Hatch set up to help troubled teenagers. The indictment charged Hatch with a scheme to defraud in connection with those contributions.

The penalties

The maximum penalties for the charges on which he was convicted are five years in prison and a $250,000 fine for each of the two counts of tax evasion, plus a $100,000 fine for filing a false S-Corporation income tax return related to the radio program income.

He had faced three years in prison on each of the two counts of wire fraud and the four counts of mail fraud he was cleared of, as well as a maximum 30 years in prison and a $1-million fine for the bank fraud count.

If Hatch had gone through with his plea agreement, he would have faced a maximum penalty of five years in prison and a $250,000 fine on each of the two tax-evasion counts -- somewhat less than he now faces.

Jen

Arianna Frances

[lawrocket 3]

Failing to report a million dollars on a tax return runs enough risk of someone finding out as it is.

But, failing to do it when you won 1 million bucks on a television show watched by tens of millions of people? You would think that he said to himself, "Hmmm. I wonder if anyone at the IRS watches this show."

Dumb ass.

My wife is hotter than your wife.

[mailin 0]

this was probably the best quote:

On the witness stand, Hatch claimed that he had put $350,000 of his Survivor winnings to cover taxes, but that an investment firm had embezzled the money. He said he didn't sue the firm because "I didn't care. It wasn't a priority."


um... if somebody embezzled $350,000 of my money you better be sure it would become a priority, real quick...

Not the brightest bulb on the tree


Jen

Arianna Frances

[PLFXpert 0]

That's funny--apparently he changed his story.

I first heard him in an interview a while back stating he was under the assumption the Survivor show paid the taxes.

Seriously, what an idiot. I dont' know how he won.

Paint me in a corner, but my color comes back.

[rwieder 0]

The one thing i don't understand is why when he won the million didn't the production company with hold the proper amount of taxes, or at lease issue him an income statement. My wife hit 5 of 6 in LOTTO not long ago, thing is so did 43 other people. She had to drive to the headquarters in Austin, Texas to collect the $$$. They gave her a tax form, and withheld the taxes before they paid out anything. I think Hatch's problems came from failing to report it on his taxes. If he did not intend to pay up, he should have skied up!

-Richard-
"You're Holding The Rope And I'm Taking The Fall"

[briguy 0]

any personal feelings aside, I think 10 years is a harsh sentence and I hope he doesn't get the maximum. Just fine the guy and stick him in jail for a year or so.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[GTAVercetti 0]

That is probably just the way Texas rolls. Mileage may vary.

Why yes, my license number is a palindrome. Thank you for noticing.

[Amazon 7]

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Just fine the guy and stick him in jail for a year or so.

Ditto,

He deserves that just for being the fat naked guy from the first series

[rwieder 0]

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Just fine the guy and stick him in jail for a year or so.

I think this is too much. Hell, they didn't lock Willie Nelson up. In the past Redd Foxx - MC Hammer - Meatloaf - Ted Nugent have all filed bankruptcy at one time or another. And none of them went to jail. It seems to me Mr. Hatch had poor council. He should have done a Chapter 13 and got an automatic stay and continued them to death. Once you fill up the "paper bin" The IRS get's too busy to fool with it a whole lot anymore.

There is no law on the books that says you have to pay taxes for monies recieced for compensation for your labor. You must however pay taxes for capitol gains, and you must file every year.

IMO Hatch's being found guilty is complete crap.

-Richard-
"You're Holding The Rope And I'm Taking The Fall"

[caress 0]

Well I got to say this... Rich is pretty ingnorant for not using his new found wealth to hire the best tax man in the U.S. Hell that should have been the first thing he did after he cashed that check. I do not think he will get a second million to try a do over!-Caress

I've learned.... That being kind is more important than being
right.

[masterrig 1]

If, you win anything on a game show, it's upt to the winner to see that the taxes are paid on whatever they win. Hatch, knew he had to pay taxes on the million bucks. He thought he could 'get around' it. He's an idiot.

When willie Nelson got in his tax difficulties, the IRS, took everything they could lay their hands on that belonged to Willie. Homes, his golf course, cars, boat, etc. He found himself afoot. He borrowed a Rolls Royce (in her name), from one of his previous wives. Sure enough, the IRS, impounded it. Willies ex called wanting her car back. Willie told her the IRS got it. She had to retrieve it herself. Eventually, everything was auctioned off. All his friends bought it all back and gave it to Willie. One his best recordings is: 'The IRS Tapes!'. All his fines and penalties were paid off. Willie's the best!


Chuck

[rwieder 0]

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Rich is pretty ingnorant for not using his new found wealth to hire the best tax man in the U.S. Hell that should have been the first thing he did after he cashed that check.

I can't believe the state in which he collected the $$$ didn't get their $$$, that's what i'm struggling with. I wouldn't say Mr. Hatch is ignorant, i would rather say he should've sought out the proper authority to aid him in the handling of his "Windfall Profit"

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I do not think he will get a second million to try a do over!

Naw, no "Do Over" here. I just heard on the CBS evening news he's facing up to 13 years in prison, they got him for not filing, and tax evasion. Under the "Capone" law lay the infractions he commited. Definitely not an informed decision, if he was informed then is is IGNORANT. But i seriouly doubt he was aware of his actions. All i can tell him is "Don't drop the soap!"

-Richard-
"You're Holding The Rope And I'm Taking The Fall"

[caress 0]

Everybody of sound mind and body knows that you have to pay taxes and die in this country! If you win a million and do not pay your taxes on it you are ignoring a fact! Okay ignorant is a bad choice of word. As for dropping the soap, I think Rich is gay already and the extra attention won't bother him a bit-Caress

I've learned.... That being kind is more important than being
right.