Saturday, February 25, 2006
Schiff, 78, accused the government of trying to suppress the truth, while his lawyer argued he was mentally ill. Schiff's earlier boast from the witness stand that he had helped thousands of followers avoid paying $2 billion in taxes was used against him at sentencing. ''Thousands of tax returns, millions and maybe billions of dollars lost,'' U.S. District Judge Kent Dawson said as he branded Schiff and his Las Vegas company, Freedom Books, ''a flimflam operation'' that encouraged others to evade taxes. ''He took their money and left them holding the bag,'' the judge said. The judge also ordered Schiff to pay more than $4.2 million in restitution....
Schiff remained defiant on Friday, declaring: ''There is no law that required me to pay the tax.'' His lawyer, Michael Nash, promised an appeal. Nash said experts diagnosed Schiff with suicidal depression, bipolar mental disorder, paranoia and delusions that made him believe paying taxes was voluntary.
Tax Analysts reports: "Schiff, who cited Socrates, Gandhi, and Nelson Mandela as other leaders who found themselves on the wrong side of the law, accused the courts and the IRS of misinterpreting the income tax rules and abridging his due process rights. He declined to yield to existing case law, insisting that his perception of the law has never been debunked."
Schiff's former girlfriend was sentenced to five years in federal prison for advising people that there was no federal law requiring them to pay income tax. From the AP story:
Cynthia Neun, 52, also was ordered to pay $1.1 million in restitution and faces years' worth of back taxes, interest and penalties. Prosecutors cast Neun as a key administrator of Schiff's Las Vegas business, Freedom Books, which advised clients that they did not have to pay federal income taxes and that the Internal Revenue Service has no legal authority to collect them. Prosecutors estimate that the fraud cost the government as much as $57 million since 1999.