Kahre wife gets probation in tax case

Danille Cline Kahre moaned and sobbed audibly in court as her husband, Robert, was sentenced Tuesday to 15 years in federal prison for tax crimes.

When her own turn came Wednesday, she just listened. Then she laid her head and arms on the defense table, and cried silently, likely with tears of gratitude.

U.S. District Judge David Ezra sentenced Danille Kahre on Wednesday to five years probation, with six months of home confinement. Afterward, she stood in the court hall, quietly rocking in a series of long hugs with her older daughters and friends.

So that Danille Kahre can care for the couple's four children alone -- Robert Kahre, 48, is already sitting in North Las Vegas detention, awaiting transfer to a federal prison -- Ezra is allowing her during confinement to take the children to doctors and attend their school functions.

He gave her the sentence that U.S. probation authorities had recommended, not the four to five years in prison that prosecutors wanted for her role in helping hide taxable assets. The stay-at-home mom was convicted in connection with her fraudulent application for a home loan, which disguised her husband's income as her own.

Before Ezra gave his sentence to Danille Kahre, though, he gave her a lecture. He noted her long relationship with Robert Kahre, 10 years her senior, dating back to her mid-teen years. The judge noted her vulnerability. He noted her utter trust in Kahre, even when he suggested acts she should have known were criminal.

"Sadly, in a misguided judgment of monumental proportions," Ezra said, "she went along."

The judge next described a "vortex" into which the Kahre children have been forced by their parents' conduct. Aside from Danille Kahre's two felony convictions, their father was convicted of 57 felony counts and will be away for a long time.

Yet the judge urged Danille Kahre not to "channel (her) personal feelings" about the government onto the children.

"If, as a result of that trauma, that turns (the children) against their own country and leads along a path of hate and retribution," Ezra warned, "they will have lost their promise" to grow into healthy, productive adults.

Robert Kahre was convicted in August of evading taxes, conspiring and obstructing tax collection with a cash payroll system he devised. It doled out gold and silver coins, but allowed workers -- at his own construction-related businesses and at 35 other businesses that used his payroll service -- to immediately trade the coins for paper money.

Testimony and evidence at trial showed that Kahre told workers he wouldn't withhold taxes for them. He told them to do their own tax returns; and that they could calculate their taxable income by the face value of the coins, not their much-higher market value. Prosecutors estimated that up to $120 million in wages went untaxed during the years in question, roughly 1999 to 2003.

Kahre had contended at trial that he had not willfully broken tax laws, but relied on sincere yet mistaken beliefs that came from personal research into the U.S. Treasury Department. His attorney, William Cohan, told jurors that Kahre was a hero for trying to fight federal tax tyranny by using the dollar value stamped on the post-1985 gold and silver coins he used for payroll, which are allowed to circulate. To convict of a tax crime, a jury must find willful intent.

At Robert Kahre's Tuesday sentencing, Ezra revealed that Las Vegas psychiatrist, Karen Cruey, had diagnosed Kahre in 2008 with a persecutory and grandiose delusional disorder. The disorder entails an inflated sense of one's worth and ability, and perceiving harassment where none exists. Kahre over the years has unsuccessfully sued a federal judge, IRS agents and the secretary of the International Monetary Fund.

Ezra on Wednesday also sentenced co-defendant Alex Loglia, who did legal research for Kahre, to 26 months in prison. On Tuesday he sentenced Lori Kahre -- who used to do payroll -- to six years in prison for conspiring with Robert, her brother. Both Loglia and Lori Kahre are released on bond pending appeal.

The judge sentenced only three of the defendants to pay restitution: Robert Kahre, $16 million; Lori Kahre, approximately $32,000; and Alex Loglia, approximately $83,000. Robert Kahre's restitution is markedly higher because he earned a profit from the payroll service, while his sister and Loglia did not.

Only one individual connected with the 35 other businesses that joined Kahre's scheme has been charged and pleaded to a tax crime. But the Internal Revenue Service can still use civil, rather than criminal procedures, against people who operated those businesses.

Contact reporter Joan Whitely at jwhitely @reviewjournal.com or 702-383-0268.