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Wesley Snipes Is Indicted on Tax Fraud Allegations

The actor is accused of trying to cheat the government out of about $12 million by filing false returns.

October 18, 2006|Claire Hoffman | Times Staff Writer

Actor Wesley Snipes, whose once-hot career has been undermined by personal and financial problems, was indicted Tuesday by a federal grand jury in Florida on charges of attempting to bilk the federal government out of almost $12 million by filing false tax refund claims.

The eight-count indictment handed up in U.S. District Court in Tampa also alleges that the star has not filed a return since 1999. Snipes, 42, could face as many as 16 years in prison.

Once considered one of Hollywood's brightest performers with such film credits as "White Men Can't Jump," "Rising Sun" the "Blade" trilogy, Snipes has been embroiled in recent years in a number of lawsuits. This summer, United Talent Agency Inc. sued its former client, alleging that Snipes failed to pay nearly $1.5 million in commissions.

According to the Internal Revenue Service, Snipes employed a tax preparer who has a history of filing false returns to reap payments for wealthy clients. Snipes also conspired with two other men to file false refund claims, authorities allege.

For The Record
Los Angeles Times Thursday October 19, 2006 Home Edition Main News Part A Page 2 National Desk 0 inches; 30 words Type of Material: Correction
Wesley Snipes indictment: A Business section article Wednesday about the indictment of Wesley Snipes on tax fraud charges gave two ages, 42 and 44, for the actor. Snipes is 44.

Snipes "tried to get the money back fraudulently," agency spokesman Steve Cole said.

U.S. Atty. Paul I. Perez said at a news conference that authorities did not know Snipes' whereabouts. The 44-year-old actor has a home outside Orlando, Fla. Calls to his home and his manager were not returned.

The indictment details Snipes' involvement over the last six years with Eddie Ray Kahn, who founded American Rights Litigators and its successor Guiding Light of God Ministries. Kahn espouses the belief that U.S. citizens do not have to pay federal income tax. The "861 argument," referring to a section of the IRS code, is considered by experts to be a fringe interpretation.

Kahn founded American Rights Litigators in 1996 in Florida and changed its name in 2003. The IRS has accused the for-profit company of promoting and selling fraudulent tax schemes.

Snipes joined the movement in 2000 and, according to the indictment, began pursuing dubious tax refunds, including a $7.4-million claim for the 1997 tax year. Snipes originally claimed an income of $19.2 million that year, authorities alleged, but in an amended return said his income was zero.

In July of this year, United Talent Agency's breach-of-contract lawsuit claimed that Snipes earned $13 million for starring in one movie in 2004, "Blade: Trinity."

In 2002, William Morris Agency filed a similar suit against Snipes, saying he owed the agency $500,000. The suit was settled.

Snipes was also sued several times by Chase Manhattan Mortgage Corp., which said he had failed to make payments on his mansion in Florida.

And, in 2002, the actor was the target of a paternity suit -- which he eventually won -- by a 33-year-old woman who claimed she had sex with the actor in a Chicago crack house and later bore his son.

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claire.hoffman@latimes.com

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The Associated Press was used in compiling this report.

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