Robert Kahre, who was convicted on multiple counts of federal tax crimes, was sentenced this morning to more than 15 years in prison.
Kahre paid his employees in gold coins at the coins’ face value, which is much less than the cash value, in what prosecutors called a scheme to avoid taxes.
Judge David Ezra ordered Kahre into immediate custody.
Ezra sentenced Lori Kahre, who had worked for her brother, to six years in prison.
But the judge permitted her to post a signature bond, which requires no cash payment, to stay out of prison pending appeal.
Ezra said he did so to allow her meaningful access to her attorney during her criminal appeal and a civil suit related to an armed raid that law enforcement and tax agents conducted to obtain evidence for the tax case.
Ezra also noted that Lori Kahre, unlike her brother, had never sent inflammatory and possibly threatening letters to federal judges about her tax beliefs.
After sentencing, Robert Kahre briefly hugged his co-defendant and new wife, Danille Cline, before federal marshals whisked him away. The marshals did not allow his two pleading, sobbing teenage daughters to hug him goodbye.
The 15-year prison sentence is vastly lower than the 27 to 33 years sought for Robert Kahre by federal prosecutors. With good-time credits, his incarceration could be reduced to about 13 years.
In addition to the prison time, Ezra also sentenced Kahre to pay restitution of more than $16 million dollars, with co-defendants jointly responsible to pay about $10 million of that amount.
The judge rejected federal prosecutors’ sentencing recommendation for Lori Kahre — 18 to 24 years in prison — as "grossly excessive and draconian."
Robert Kahre and Cline had four children together during their long relationship. But they did not marry until Saturday, in St. George, Utah, where the family has been living. He is 48; their youngest child was born during a 2007 trial on similar charges, which ended in a hung jury on Kahre’s counts.
The two Kahres and Alex Loglia, Robert Kahre’s former assistant who did legal research, were tried again earlier this year. The revised indictment was for participating in Robert Kahre’s system of paying workers in gold and silver coins, and telling them they could go by the coins’ face value when determining how much they owed the Internal Revenue Service. Face values of United States gold and silver coins are far lower than the market value.
The trial, which took three months, ended Aug. 14.
The jury went with the prosecution’s argument that Kahre’s payroll system was a variation of paying cash under the table, with no taxes withheld by the employer.
Kahre used his system with people who worked at his several construction-trade businesses, and later marketed it to 35 other local businesses. Kahre shuttered his own businesses in August, because he could no longer afford the legal steps required to keep them open.
"This was a significant case," said Paul Camacho, special agent in charge of the IRS’ Las Vegas office. "The government was not the only victim."
Hundreds of local tradespeople who received their pay from Kahre’s payroll service will not earn Social Security credit for the years 1999 through 2003, Camacho explained.
Loglia and Cline are scheduled to be sentenced Wednesday.