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Snipes Beats Felony Charges In Tax Trial

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By TRAVIS REED, The Associated Press

Published: February 2, 2008

OCALA - Wesley Snipes' attorneys admitted his ideas were crazy - that Americans don't generally owe taxes, and the IRS can't legally collect them anyway.

But crazy isn't a crime, they said, and eventually a 12-person jury agreed.

Snipes was acquitted Friday of felony tax fraud and conspiracy - the government's top allegations against him - but convicted of three misdemeanors for willful failure to file a tax return. The "Blade" trilogy star was also acquitted, however, on three identical misdemeanor counts for failure to file in subsequent years.

"There was no intent to defraud anybody - he's not a fraudster, he's not a felon," defense attorney Robert Barnes said, declaring victory. "There's a couple of returns he should have filed. He'll be looking to make amends on anything he needs to make amends on."

Snipes still faces up to three years in prison, and he must pay undetermined millions in back taxes that could be pursued in civil court.

The actor sat emotionless as his verdict was read, then nodded in relief after his attorney offered a congratulatory pat on the leg. Afterward, he refused to speak with a throng of journalists, who spent three days outside the small federal courthouse in West Central Florida as jurors deliberated.

Snipes Was Victim, Attorneys Said

Snipes' attorneys argued he was a victim of crooked advisers, and the jury seemed to agree. Co-defendants Eddie Ray Kahn, the founder of a tax protest group, and Douglas P. Rosile, a delicensed accountant, were convicted Friday by the same panel of the fraud and conspiracy charges the government tried to pin on Snipes. Both face up to 10 years in prison, five for each felony count.

Prosecutors said Snipes refused to file tax returns from 1999-2004, a period in which he signed two contracts for more than $10 million on "Blade" sequels.

The action star, who also appeared in "White Men Can't Jump," is among the most famous targets of an IRS criminal investigation, and his prosecution was key for the government.

"We thought there was sufficient evidence for a conviction on all counts, but obviously the jury disagreed," U.S. Attorney Robert O'Neill said. "We respect the jury system when we win and we respect the jury system when we lose."

Snipes paid taxes in the 1990s, but changed his mind after meeting Kahn in 2000. He allegedly stopped filing returns, illegally sought $11 million in 1996 and 1997 taxes paid and drew fake checks for the U.S. Treasury.

Snipes and company fought the government with a number of bizarre arguments - saying IRS code meant income earned in this country wasn't taxable, and the agency terrorized citizens but had no legal authority.

O'Neill said the jury may have bought Snipes' argument that he shouldn't be tried in Florida for certain tax years, because the actor claimed to live elsewhere.

Also possible is that jurors determined Snipes did not have to file returns for 2002-04 because the IRS notified him he was a criminal investigation target. At that point, investigators told him, any filings could be used against him.

Not The Usual Tax Case

Most tax trials are handled in civil court, because the government has an additional burden of proof in criminal cases. Prosecutors must show not only that someone broke the law, but that he or she meant to defraud the government.

Barnes said the Justice Department has no business trying cases like this in criminal court anyway.

"I think there are people who have very sincere political beliefs," Barnes said, though admitting Snipes' tax arguments were wrong. "I disagree with the IRS' strategy of putting people in prison by calling them, even if they are, 'tax protesters.' I don't think anybody should be in prison for being a protester."

Other defendants have won acquittal because the jury thought they sincerely believed they did not have to pay, but the import of Snipes' case was his fame.

So will it encourage others to follow the actor's lead?

"I don't know - time will tell," O'Neill said.

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