Lynne Meredith, a flamboyant tax protester whose bestselling books and seminars promoted the notion that paying taxes was voluntary, was sentenced to more than 10 years in federal prison Monday for conspiring to defraud the Internal Revenue Service and failing to file personal income tax returns.
Four associates who helped Meredith operate her Southern California-based We the People organization received sentences ranging from 20 months to five years in prison.
"Your honor, I'm not a conspirator. I'm a constitutionalist," Meredith, 55, told U.S. District Judge Dean Pregerson as she fought back tears.
Meredith, who once drove a Corvette convertible with a vanity plate reading TAXREBL, said she still believes the federal government has no power to levy taxes on private citizens.
She insisted that she was simply exercising her 1st Amendment right to free speech and was not responsible for her clients' failure to pay their taxes.
"I didn't tell anyone, 'Don't file a tax return,' " she said. "Obviously, people are going to make their own determination."
Pregerson called her a charismatic figure driven by "misguided passion."
From 1991 to 2002, Meredith traveled the country giving seminars and promoting three books she had written, advising people that they could avoid paying taxes by placing their assets in so-called pure trusts.
She and her staff sold the pure trusts, along with fabricated tax identification numbers, for as much as $1,000, according to testimony in their 13-week trial last year.
IRS officials estimated that Meredith's organization netted more than $9.2 million from the seminars and books.
Prosecutors also accused Meredith of directing clients to file frivolous tax returns that listed no reportable income. Many who did so were later subjected to penalties, liens and wage garnishments by the IRS. Several went to jail for failing to pay taxes.
When those dunned by the IRS went back to We the People for help, they were given letters to send to the tax collector. The letters proved useless.
In one of her books, titled "How to Cook a Vulture," Meredith promised readers she could show them how to get the IRS to stop collection activities, how to successfully sue the IRS and how to get the agency to write a letter stating, "We agree that you are not liable for filing a 1040 form."
In a sentencing memorandum filed with the court, Assistant U.S. Attys. Alicia Villarreal and Brian Hershman argued that Meredith was the leader of a vast scam that victimized hundreds, if not thousands, of gullible people.
Pleading for leniency, Meredith told Pregerson on Monday, "I'm 55 years old. I'll be an old woman before I get out."
Pregerson sentenced her to 121 months in prison and ordered her to pay $2 million restitution to the IRS after she is released. She will receive credit for 13 months she has spent behind bars since her conviction in May 2004.
Meredith's second in command, Gayle Bybee, 57, received a five-year prison term. Pregerson said he initially considered imposing a stiffer sentence but changed his mind upon reflection.
Although agreeing that Bybee helped manage the organization, he said Meredith was the driving force who called the shots.
Bybee and Meredith, both from Sunset Beach, were close friends. Bybee joined We the People in 1997 after giving up a middle management post with a bank. She too has been in custody since her conviction.
Also sentenced Monday were Teresa Manharth Giordano, 40, of Murrieta, to 40 months in prison; Willie Watts, 46, also from Murrieta, to 36 months; and Gregory Karl, 55, of Solana Beach, to 20 months.