Anti-income tax proponent Irwin Schiff arrives at U.S. District Court on Monday after a jury concluded deliberations for his criminal trial. Photo by Gary Thompson.
Lawrence Cohen, co-defendant of Irwin Schiff, was the only one of the three charged to remain free after their income tax evasion case. Photo by Gary Thompson.
A federal jury delivered a blow to the anti-income tax movement on Monday by handing down 13 guilty verdicts against Irwin Schiff, a 77-year-old Las Vegan who has practiced and peddled the concept that paying taxes is voluntary.
Schiff faces a potential lengthy prison term and $3.25 million in fines for conspiring to defraud the Internal Revenue Service, tax evasion and filing false returns.
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The outcome is the third time that Schiff has been convicted of tax offenses.
Schiff was handcuffed after the verdicts were announced and will remain in custody until his sentencing hearing on Jan. 20.
"I am going to fight these convictions on numerous grounds," said Schiff, who objected to the court decision to jail him.
"You have no reason to put me in jail," Schiff told U.S. District Court Judge Kent Dawson. "I am not a flight risk at all."
Dawson, who has exchanged heated words with Schiff over the course of the five-week trial, called the anti-tax guru a danger to the public.
Schiff represented himself during the trial, drawing several sanctions for contempt that will figure into his sentencing.
Dawson said that Schiff had proven to be "unmanageable in the courtroom" and had made the statement that: "All federal court judges are corrupt."
Dawson then upheld federal prosecutors who objected to Schiff's release because they do think him to be a flight risk, with financial reserves in overseas bank accounts.
The judge also said Schiff is facing "what is tantamount to a life sentence."
"We don't know what (resources) the government's unaware of," said Jeffrey Neiman, trial attorney for the U.S. Department of Justice's Tax Division.
Schiff's former employee and girlfriend Cynthia Neun was found guilty on 15 separate counts, which included Social Security disability fraud on top of the conspiracy charges.
Prosecutors presented evidence that Neun was collecting disability without reporting that she was employed at Schiff's business, Freedom Books.
Like Schiff, Neun was returned to the custody of U.S. marshals. A hearing is scheduled for 1 p.m. today in which prosecutors and the defense will make cases for why Neun should or should not be released until sentencing takes place on Jan. 27.
"At the very least right now, she should have the opportunity to get her affairs together," Neun's attorney, Michael Cristalli, said. "There's not evidence to suggest she won't show up at any court appearances."
Neiman made clear that federal prosecutors would oppose Neun's release and said that she recently had inherited $25,000 from her father's estate, providing her with the resources to flee.
The only defendant jurors seemed to find sympathy with was Lawrence Cohen, who was acquitted of conspiracy charges and found guilty on one count of aiding and assisting an individual prepare a false tax return.
Cohen, also a former employee of Freedom Books, was relieved for himself but said he was concerned about the fate of Neun and Schiff.
"I am sad," said Cohen, the only one of the three to leave federal court a free man, at least until his sentence is handed down Jan. 27.
The results angered Schiff supporters and those who endorse "tax honesty."
Schiff, author of "The Federal Mafia: How the Government Illegally Imposes and Unlawfully Collects Income Taxes," was at the forefront of those who contend that no law exists that requires people to pay income taxes.
He drew the attention of the IRS when thousands of people submitted Schiff's "zero returns," which calls for listing zero income on tax returns.
"He's 100 percent innocent, that's what I think," said one 44-year-old man who has attended the trial regularly.
"He was never allowed to put on a defense. ... This is a travesty. The people with the tax honesty movement aren't a bunch of wackos who are just trying to twist the law in their favor."
The man declined to give his name and said he feared retaliation from the IRS.
IRS Special Agent J. Wesley Eddy, assigned to Las Vegas, said the Schiff verdicts demonstrate no gray area exists on the issue of paying income taxes.
"Today's conviction sends a clear message that we are committed to vigorously enforcing the tax laws," Eddy said.
Steve Johnson, a professor for UNLV's Boyd Law School, has followed the developments of the Schiff trial.
He teaches tax law and said he expects the conclusion will deflate the tax protest movement to some extent because the guilty verdicts show that Schiff's ideas will not hold up in court.
"This is a huge win for the government and will have national repercussions," Johnson said.
Because of limited resources, Johnson said, the IRS chooses to prosecute about 3,000 criminal cases a year.
To make the cut, a case has to be high-profile and involve someone who is a visible figure. Schiff, Johnson said, has been an important leader among tax protesters for 30 years.
Johnson said he understands Dawson's decision to return Schiff to police custody.
"He's not a danger because he's the guy with a machine gun," Johnson said. "But look at what he's spinning. Who has it hurt the most? The people hurt most by Schiff are the people who follow him."