Federal government accuses Wesley Snipes of failing to pay $12M in taxes

Tuesday, October 17th 2006, 1:56 pm

By: News On 6

TAMPA, Fla. (AP) _ Wesley Snipes was indicted Tuesday on tax fraud charges that accuse the actor of trying to cheat the federal government out of nearly $12 million in false refund claims and not filing any returns for six years.

Prosecutors said Snipes fraudulently claimed refunds totaling nearly $12 million in 1996 and 1997 on income taxes already paid. The star of the ``Blade'' trilogy and other hit films such as ``Jungle Fever'' and ``White Men Can't Jump'' was also charged with failure to file returns from 1999 through 2004.

According to the indictment, Snipes had his taxes prepared by accountants with a history of filing false returns to reap payments for their clients. As part of the deal, the indictment alleges, the firm American Rights Litigators would receive 20 percent of refunds from clients.

``It's a conspiracy against the IRS, basically to harass the IRS, from doing its lawful job in term of collection of taxes,'' U.S. Attorney Paul I. Perez said at a news conference.

If convicted of all the charges, Snipes could face 16 years in prison _ five years each on two conspiracy counts and one year each on six counts of failure to file income tax returns.

Snipes, 44, who had a home in Windermere near Orlando, has not been arrested because authorities don't know where he is, Perez said. Snipes' manager and attorney did not return phone messages from The Associated Press.

``We've spoken to his former attorneys over the weekend,'' Perez said. ``We presume that he knows, and of course after this press conference he will definitely know.''

The indictment said Snipes conspired with American Rights Litigators' founder Eddie Ray Kahn and tax preparer Douglas P. Rosile Sr. to file false refund claims based on a bogus argument that only income from foreign sources was subject to taxation.

That included a claim for a $7.3 million refund for 1997, in which an amended tax return reported Snipes' adjusted income as zero.

The Justice Department sued Rosile in 2002 for allegedly filing bogus tax refund claims totaling more than $36 million on behalf of clients in 32 states. The suit is still pending.

Snipes was not named as a defendant in that case, but the lawsuit said the preparer's largest claim was an amended income tax return filed on behalf of the actor and dated April 14, 2001.

Rosile is in custody in Ocala, Perez said, and the third defendant named in the indictment, Kahn, is believed to be out of the country.

A call to an attorney who is representing Rosile in the 2002 lawsuit was not returned. It wasn't clear if he had any other legal representation. Federal court records indicate that he filed for bankruptcy on June 29.

Perez said the IRS considers the tax preparation business founded by Kahn as a ``tax protest organization.''