A federal jury Friday found Las Vegas businessman Robert Kahre guilty of all 57 felony counts of evading taxes, failing to withhold taxes from workers' wages, and engaging in fraud during real estate transactions.
Three other defendants were found guilty of most but not all of their related charges.
Kahre had claimed he tried to legally avoid taxes by creating a cash payroll system that disbursed gold and silver coins, on the theory that recipients could go by the coins' face value for tax purposes.
Though the trial lasted almost three months, the jury took only a day and a half to deliberate.
As lengthy sheets of guilty verdicts were read, Kahre's longtime girlfriend Danille Cline sobbed, putting her head against him.
Three jurors were observed crying too. Some spectators, sitting on the defense side of the full courtroom, also were in tears.
After the verdicts were accepted, federal prosecutor J. Gregory Damm asked Judge David Ezra to order the two male defendants, Kahre and Alex Loglia, into immediate custody.
As Damm spoke, two law enforcement officers took positions in front of the spectator section, near the gate that separates the public from the rest of the courtroom.
But Ezra permitted all four defendants to remain free until their Nov. 17 sentencings.
The judge spoke to the 48-year-old businessman before denying the government's request to detain the two.
Ezra asked Kahre for his word that he would not flee the community, nor commit violence nor encourage a "fringe element" to commit violence.
Kahre nodded his head yes, that he would abide by the conditions.
"Your honor," Kahre said when he stood to answer, "This last 17 years of my life has been to get my issues" aired about taxation and the importance of a gold standard to back U.S. currency.
"My life is basically over," Kahre said,, indicating that before sentencing he wants to "spend time with family and tie up some loose ends."
He faces up to 296 years in prison and fines of up to $14 million, according to the U.S. attorney's office.
Kahre and co-defendant Danille Cline have four children, with the youngest born during Kahre's 2007 trial on similar charges. That trial, with nine defendants, ended with no convictions.
This time Kahre was convicted in the payroll conspiracy, along with his sister, Lori Kahre, who works for him.
But defendant Alex Loglia, who used to work for Kahre, was acquitted of his conspiracy charge.
Lori Kahre was acquitted of one count but she and Loglia were found guilty of multiple other counts of tax evasion.
Cline was acquitted of two counts of wire fraud in connection with two home purchases, but she was convicted of another count involving a third real-estate transaction.
Jurors accepted the prosecution theory that the couple bought themselves a series of homes in Cline's name and on the strength of her credit -- even though she had not worked outside the home in almost two decades -- in order to hide Kahre's income.
The two held a commitment ceremony but do not have a marriage license, although they did not make those choices for any tax benefit, Kahre's defense attorneys have said.
U.S. Attorney Gregory Brower said late Friday afternoon that he views the four acquittals as a sign that the jury carefully scrutinized each count.
"It certainly was not a rubber stamp of the government's case," Brower said. "I can't say enough about the extraordinary efforts of the investigators, the prosecutors, and the jury."
In order to convict, jury members had to decide that the defendants knowingly broke federal tax laws, with a criminal intent rather than out of good-faith ignorance.
Jurors rejected a recurring defense theme that the defendants sincerely believed Congress gave them the permission to go by the dollar amounts stamped into the coins by the U.S. Mint.
Certified public account Wayne Paul, brother of Texas congressman Ron Paul, testified that Congress created a dual monetary system when it authorized the gold and silver coins that currently circulate. That means, according to the accountant, that people can switch between coin and paper money, always going by the printed value.
Prosecutors at the Kahre trial showed that defendants selectively assigned a value of their coin income -- switching between face value and market value -- depending on whether they were trying to lower their tax liability or qualify for a home or car loan.
Jurors heard how the payroll system operated. When workers at Kahre's six businesses and more than 30 companies that were payroll clients went to pick up their pay, each received a tube containing coins.
Most immediately converted their coins to paper cash, in an amount equivalent to the coins' fair-market value.
Kahre did not withhold taxes, because he classified all the workers as independent contractors, who are responsible for doing their own taxes.
According to prosecutors, during the span of the payroll conspiracy, Kahre paid at least $25 million in untaxed wages to his workers and about $95 million to people who worked for client companies.
Kahre, or the defendants who worked for him, occasionally kept some pay in coin form. But prosecutors argued that the process of converting coin to paper money was a sham transaction, with no economic value, and was designed only to disguise tax evasion. As proof, prosecutors cited business records suggesting Kahre kept only $40,000 in coins in his business safe in one three-month period, during which he covered a payroll of about $8 million.
When William Cohan, Kahre's attorney, argued for his client's release until sentencing, Cohan disclosed that he and Lisa Rasmussen, Kahre's other attorney, are not being paid for their representation. Cohan also said Kahre is virtually bankrupt.
Federal and local law enforcement raided several Kahre business locations in 2003 to seize evidence in the tax investigation that culminated in Friday's verdicts. Since then those businesses have gone downhill, losing customers and workers.
Kahre wouldn't comment after the adjournment. He and Cline huddled with weeping relatives outside the courtroom. Then the two went to an office inside the courthouse to make arrangements for their pre-sentencing release.Defense attorneys said they intend to appeal the verdicts.
“Then you will see the rise of the double standard—the men who live by force, yet count on those who live by trade to create the value of their looted money—the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law—men who use force to seize the wealth of DISARMED victims—then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.
“Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion— when you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.
“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: ‘Account overdrawn.’
“When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded." Ayn Rand on Money
by Paul Bonneau
Sean Gangol wrote against the notion of a direct democracy, saying that "we are actually living in a republic."
I have heard this argument before, but find as the years go on, that it makes less and less sense to me.
So a direct democracy, the people of the city of San Francisco, voted to ban guns. So what? Are legislative bodies any less capable of insanity? How many billions in taxpayer dollars got sent to Wall Street not long ago, even though in a direct democracy they clearly wouldn't have?
This idea of a "representative republic" stands on the assumption that the people supposedly representing us, have more sense than the average Joe, and better morals. But what happens when the reverse is the case, as it so clearly seems to be? What happens when members of legislative bodies are actually, on average, our mental and moral inferiors? What happens when many if not most of them are actually psychopaths, without any conscience at all? Is being a representative republic such a great deal then?
To me, the phrase "representative republic" is just a euphemism for "oligarchy". Just another propaganda term thrown out there by the ruling class to pull the wool over our eyes. There is no sense in which the two senators and one representative of the State of Wyoming represent me. When someone represents me, that person does my bidding. The times I have bothered writing these so-called representatives, boiled down to my begging them not to do the opposite of what I want (I've mostly given up on the practice, as it is a waste of time). How can they represent me, when they don't even know what I want—assuming they cared (which they don't)? How can they represent me, when my neighbor whom they also represent, wants the opposite of what I want?
This is a very collectivist notion. They even have a propaganda term for it, "the will of the people". There is no such will, there is only many individual wills. Anyone who claims to know the will of the people, much less represent it, is a liar.
I'm not a collectivist. I prefer plain speech, not euphemisms. The "will of the people" is nothing but a will-o'-the-wisp! We don't have a representative republic; we have an oligarchy based on violence. And even if we did have such a thing as a representative republic, it would be no better than a direct democracy. People in Congress don't represent us; they represent themselves, and their cronies.
That's a civics lesson you will never hear in a government school.