Yesterday’s Orlando Sentinel featured a story on 67 year old Eddie Ray Kahn, a tax protestor who advised action film star Wesley Snipes (and 4,000 other taxpayers) on how to ‘beat the Internal Revenue Service.’ Kahn has been given 20 additional years in prison time for his role in creating the “Walmart of tax fraud” – a bargain priced scheme he devised to help people dodge their tax obligations. The full release, written by By Stephen Hudak, can be found below.
While Wesley Snipes fights to stay out of prison, a Lake County tax protester earned an additional 20 years behind bars for advising the movie star and 4,000 other clients how to beat the Internal Revenue Service.
Eddie Ray Kahn, 67, who operated a “tax defier” organization from a rented second-floor office in downtown Mount Dora, and three other Florida men were convicted of conspiracy in federal court in Washington.
All worked for Kahn’s American Rights Litigators, which prosecutors described in a sentencing memorandum as “the Walmart of tax fraud,” selling bargain-priced schemes to help people dodge tax obligations.
Kahn was convicted as a co-defendant in Snipes’ trial in 2008 and received a 10-year sentence in that case. But federal court records say his now-defunct organization, which operated for seven years as American Rights Litigators or the Guiding Light of God Ministries, had a presence in all 50 states and more than 4,800 paying members in the U.S.
Government attorneys also branded Kahn and his co-defendants as “paper terrorists.”
Kahn, a former Texas police officer who lived on a 5-acre rented estate in Sorrento, employed tactics that wreaked havoc on the IRS, forcing agents to respond to thousands of pointless, harassing or intimidating documents, according to federal prosecutors.
‘Having Fun With the Tax Man’
IRS agents were stymied from assessing taxes because American Rights Litigators customers “sent in bales of frivolous letters instead of legitimate tax returns,” prosecutors argued in court papers. “Revenue officers were prevented from collecting taxes because, instead of real checks, they received fake [bills of exchange].”
Snipes was among the clients who tried the strategies.
Kahn’s organization manufactured, printed and, for as little as $25, sold more than a thousand “bills of exchange,” worthless checklike documents that American Rights Litigators and its clients sent to the IRS in purported payment of federal tax obligations.
He also advocated that clients apply to become “overseers” — one-person, nonprofit religious corporations that would allow them to enjoy special tax benefits available to bona fide religious groups and church leaders.
Kahn called himself the “Overseer of the Guiding Light of God Ministries.” He also filed a vow of poverty with the Lake County Clerk of Courts and claimed that he had given all of his assets to his personal ministry.
The government, citing records that an agent found in computers at the Mount Dora office, claims that Kahn and his organization intended to cheat the U.S. out of $1.1 billion in federal taxes owed by its clients.
Those clients included Snipes as well as recently imprisoned tax-defying dentist Mark S. Maggert of Fruitland Park and other professionals who subscribed to American Rights Litigators’ newsletters, visited its website or attended Kahn’s U.S. seminars, one of which was titled “Having Fun With the Tax Man.”
‘Kidnapped’ by government?
Kahn spoke at a private seminar for Snipes and skeptical employees of the actor’s production company. He did not appeal his sentence in the Snipes case, while the Orlando-born film star of “U.S. Marshals,” “Jungle Fever” and “Major League” lost an appellate review and last month asked a federal judge to set aside his convictions and order a new trial.
If his latest bid is unsuccessful, Snipes could begin a 36-month sentence.
Kahn’s personal battle with the IRS began in the early 1980s and led to a three-year prison sentence for willful failure to file tax returns, the same tax-related crime that an Ocala jury decided that Snipes had committed.
In 2004, a month after Treasury agents descended upon his business offices in Lake County, Kahn and his wife fled the country for Panama. He was later arrested there and returned to the U.S. to stand trial with Snipes.
His followers say he was kidnapped by the U.S. government.
As he did to U.S. District Judge William Terrell Hodges in the Snipes’ trial, Kahn assailed the presiding federal judge in Washington as lacking the jurisdiction to preside over him. He also accused federal prosecutors of taking bribes.
‘River of documentary sewage’
The three associates sentenced with Kahn last week received shorter sentences, even though, according to prosecutors, they “contributed greatly … to the river of documentary sewage flowing into IRS Service Centers.”
One of those who received a 10-year sentence, Danny True, 58, of Deltona, has filed an appeal. The IRS took his family’s home in 2004. Four of his teenage children also worked at American Rights Litigators, performing clerical duties.
True’s lawyer in Washington, J. Michael Hannon, defended him as “very different from the other defendants and, indeed, from any other defendant who has been sentenced because of involvement” with Kahn’s company.
Hannon described Kahn as a “charlatan” and a persuasive salesman of his tax-defying schemes, while True had arrived at his views on the tax code through honest research at the law library in downtown Orlando.
As for Kahn, he has previously declined interview requests but apparently communicates with followers through an Internet newsletter, titled “Inside the Beast,” which seeks donations for a defense fund run by his wife, Kookie. She did not respond to an e-mail request through the newsletter.
The most recent seven-page newsletter, which cites several Bible passages, also includes a disclaimer that describes Kahn’s “illegal incarceration” and asks readers to refrain from sending e-mails to “ask for tax advice.”
Posted by JK Harris