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Tax Protester Is Sentenced to Prison

George Henry `Nick' Jesson of Fountain Valley had disputed the legality of withholding personal income taxes.

April 04, 2006|Jean O. Pasco | Times Staff Writer

A nationally known anti-tax crusader who ran for California governor in 2002 must serve 27 months in prison for tax fraud, a federal judge ordered Monday.

George Henry "Nick" Jesson, 55, of Fountain Valley also was ordered by U.S. District Judge Percy Anderson in Los Angeles to pay $215,454 in restitution to the federal government. He was taken into custody after sentencing.

The sentence was "wholly appropriate under the circumstances," Assistant U.S. Atty. Sandra Brown said after the hearing. She said the judge indicated that it would deter others from contemplating anti-tax protests.

"Obviously, that was a concern for the court," she said.

Jesson became a national tax protest figure in 2001 through his affiliation with the We the People Foundation for Constitutional Education, which bought a full-page ad in USA Today proclaiming that income taxes were unconstitutional.

Jesson argued in speeches and on websites that withholding personal income taxes violated the Constitution, and that employees at his Huntington Beach business, No Time Delay Electronics, could refuse to have income taxes withheld from their paychecks. He dared tax agents to try to collect from him.

"If we don't stand up and fight for what is right, then what's going to happen to our children?" he said in a 2001 interview after his home and business were raided by state tax agents. He described the raids as terrorist attacks.

Jesson's wife, Trina Thi Vu, declined to comment Monday after the sentencing, as did her attorney, citing pending state tax charges against the couple. Jesson's attorney, Robert Barnes of Malibu, could not be reached for comment.

The couple will be tried later this year on six felony counts of failing to pay state taxes on $3 million in income from 1997 to 1999. If convicted, Jesson could get as much as nine more years in prison, and his wife as much as seven years.

Jesson pleaded guilty in June 2005 to signing and filing false IRS claim forms for his company, falsely reporting that no wages had been paid to employees in 1997. Documents showed No Time Delay Electronics paid wages of $177,083 to Jesson and $273,236 to his wife, which Jesson acknowledged in court was taxable income. No Time Delay Electronics also paid wages to other employees in 1997.

Jesson also conceded to having falsely claimed that he should receive a refund of $215,454 in employment taxes paid that year. He took the refund and used it for himself, prosecutors said. Jesson also conceded that he had tried to obtain a second tax refund of $61,388 in 1997.

Last month, Jesson skipped his first sentencing date and was picked up by Riverside County sheriff's deputies after his wife told federal marshals he had left the house that morning despondent and possibly with a gun. He underwent a psychiatric evaluation before Monday's sentencing, Brown said, and has been in custody since then.

Jesson finished fourth of seven candidates in the 2002 GOP primary for governor. He ran on an anti-tax platform and got 19,287 votes -- less than 1% of the ballots cast.

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