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The plot could have been hatched by any good Hollywood screenwriter: one of Tinsel Town’s leading men embarks on a bizarre scheme to cheat the government out of millions of dollars, then flees to Africa on a fake passport when the net closes in.
The storyline, however, is all too real according to prosecutors at the tax evasion trial of actor Wesley Snipes, who faced a court in Ocala, Florida, today accused of not paying anything on the £19 million ($38 million) he earned between 1999 and 2004 for hit movies including Blade.
Snipes, 45, is accused with two financial advisers of using a “creative” interpretation of America’s complicated tax laws to justify his failure to pay and of fraudulently reclaiming another £3.5 million ($7 million) for earlier years that the actor said he was entitled to have refunded.
According to his defence lawyers, Snipes is only guilty of receiving bad advice from the pair and had no intention to defraud. “He did what every other American is entitled to, to ask the Internal Revenue Service for information,” Robert G Bernhoft, his lead attorney, told the Tampa Tribune.
“Asking questions is not a crime, even if the IRS would like it to be.” But prosecutors paint a different picture of the tough-guy actor, who has a star on the Hollywood Walk of Fame. He embarked on “an intentionally false, fictitious and fraudulent” misapplication of the law, the indictment says.
According to the charges, Snipes, who faces up to 16 years in jail if convicted of conspiracy to defraud the US Government and failure to file tax returns for six years from 1999, signed up for an illegal scheme marketed by Douglas Rosile and Eddie Ray Kahn, his advisers and fellow defendants.
The two set up a company 15 years ago called American Rights Litigators, offering its “861 programme” to clients in return for a share of the tax savings, or of any refunds made by the Internal Revenue Service. The so-called 861 position, named after a section of federal tax code, has been used by protestors to claim that income tax is not payable on anything earned by US citizens within the borders of the country. But prosecutors and tax experts argue that it is a frivolous stance that has been discredited in at least eight previous tax avoidance trials.
Rosile and Kahn’s group later changed its name to the Guiding Light of God Ministries, but was religious only in name, prosecutors say. Snipes continued paying a membership fee to them until 2004.
“In reality, they were for-profit, commercial enterprises that promoted and sold fraudulent tax schemes that interfered with the administration of the internal revenue laws of the United States,” the indictment says.
In 2005, a year before he was charged but after a federal investigation into his tax affairs was under way, the actor was arrested trying to enter South Africa on a forged passport and was deported back to the US.
“He is completely innocent and acted in good faith, with no bad purpose or criminal intent to deceive or defraud at all,” said Robert Barnes, a member of Snipes’ legal team.
The trial began yesterday with jury selection and is expected to last four weeks.
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