PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

PAYROLL CONSPIRACY CASE: Jury gets income tax case
IRS requires using coins' market value

By JOAN WHITELY
LAS VEGAS REVIEW-JOURNAL

Jurors start deliberating today whether business owner Robert Kahre and several others willfully broke federal law by taking their pay in gold and silver coins, but reporting only the coins' modest face value on their income tax returns.

Jurors must examine two diametrically opposed portraits of Kahre that were painted during the trial, which has lasted almost three months.

The 48-year-old Rancho High graduate, who has six construction businesses, is a man with a "portfolio of excuses" who was "on a mission of deception" to disguise his tax evasion, according to federal prosecutor J. Gregory Damm.

Or, according to his attorney, William Cohan, Kahre is a brave sentinel who tried to fend off federal tax tyranny by exercising what he believed to be his right to go by the dollar value stamped on the post-1985 $50 gold and $1 silver coins he used for payroll.

Kahre faces more than 50 counts on allegations that he evaded taxes, failed to turn over withholding taxes of workers and hid assets through real estate transactions.

Judge David Ezra has instructed the jury that the law requires a taxpayer to go by the fair market value of such coins for tax purposes, not the much lower face value. But jurors must decide if Kahre and two others charged in the payroll conspiracy knew about that requirement and still chose to disobey it, which would form a criminal intent.

The other two are Kahre's sister, Lori Kahre, who works for him, and Alex Loglia, a former business assistant.

Jurors also must decide whether Robert Kahre and a fourth defendant, Danille Cline, who stays at home to care for their four children, hid taxable assets when they bought homes in her name using his income. The family lives in southern Utah, but has been renting a condo here during the trial, which began in mid-May.

The prosecution and defense agree that Kahre did extensive research to shore up his tax beliefs. From financial analysts and lawyers around the country, he collected written opinions to support his views.
But the two sides differ on why he did the research.

"Selective research negates good faith," Damm said Tuesday in his closing argument.

To demonstrate deceit, federal prosecutors cited one of the opinions. Floyd Wright, California author of a tax-related book, wrote to Kahre in 2000 that if he built a portfolio of such opinions, it would demonstrate good faith in his belief system, causing the Internal Revenue Service to find easier targets to prosecute.

Cohan argued Tuesday that, although Kahre's mistaken belief doesn't exempt him from paying taxes, it prevents him from having criminal intent.
To show Kahre's good faith, Cohan emphasized that defense witness

Wayne Paul, a certified public accountant with 40 years experience, took no money from Kahre, but shares his unorthodox ideas. Paul is the brother of Ron Paul, the Texas congressman who helped design a 1985 federal law allowing the U.S. Mint to again issue circulating gold and silver coins.

Wayne Paul and Kahre have exchanged materials on tax and government theory for several years. They believe circulating gold and silver coins are legal tender for use at face value, testimony shows.

The two also think the U.S. treasury secretary, who oversees the IRS, is beholden to foreign powers because he plays a leadership role in international economic development organizations that receive some U.S. funding. That is another reason Kahre cites for not cooperating with the IRS.

At the height of Kahre's payroll service, he had more than 30 other local companies also enrolled as customers. One owner of an outside business has been tried for related tax crimes. Several government witnesses testified in exchange for reduction or elimination of criminal charges for participating in either Kahre's payroll system or his real estate deals.
Kahre's tax saga began in the early 1990s, when he went through bankruptcy after several partners in a now-defunct Las Vegas construction business took assets and left town, leaving Kahre with an unpaid IRS bill that led to seizure of his business equipment.

Starting over as a sole proprietor, Kahre embarked on tax research and began filing numerous lawsuits to dispute his tax liability, against parties including the U.S. secretary of the treasury and the IRS.

All the lawsuits were dismissed as frivolous, which the government cited to argue Kahre had plenty of notice that his ideas were wrong. The defense cited it to show his devotion to his beliefs.

By 2002, Kahre's net worth was more than $6 million, according to a financial statement cited by prosecutors. Kahre has not filed an income tax return since the mid-1990s.

In a 2003 raid of several Kahre business locations, authorities seized evidence for a tax investigation. In 2007, Kahre and eight others went to trial before Judge Robert Jones, with no convictions. Most of those defendants were acquitted or left out of the latest reformulated indictment.

But the 2007 jury was unable to reach a verdict regarding the Kahre siblings and Loglia, which allowed authorities to prosecute them again. Cline is a new defendant.

Alex Loglia has been victimized by IRS hypocrisy and error, his attorney, Joel Hansen, argued Wednesday. For the years in question, Loglia mishandled his taxes based on his sincere beliefs. In 2004, Loglia started realizing his actions ran counter to law, so he amended his returns and attempted to pay penalties and back taxes to the IRS. But the agency has repeatedly failed to credit him, Hansen says.

The government contends Loglia not only conspired by taking coins for pay, but helped Kahre recruit new business to the payroll service. An IRS agent testifying for the government said Loglia owes $17,000 in taxes.
Lori Kahre faces conspiracy charges because she took pay in coins and also did payroll work for her brother. She saw numerous workers take pay the same way at more than 30 participating companies, and that reinforced her mistaken belief, according to Michael Kennedy, the federal public defender representing her.

Prosecutors can't prove criminal intent if Lori Kahre only "likely, probably, maybe" should have known her tax theory was wrong, according to Kennedy. She owes about $37,000 in back taxes, the same IRS witness testified.

Contact reporter Joan Whitely at jwhitely@reviewjournal.com or 702-383-0268.

Find this article at:
http://www.lvrj.com/news/53117037.html

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Interesting you post this and my Investor's Business Daily NEWS tells me on the front page UBS is turning in the 52,000 Americans who secretly bank there as "TAX DOGERS!"


And they ain't playing for LOS ANGELES either! (joke)

I figured this SWISS SCREW out about five years ago - so I hesitated to KEEP things 20 thousand MILES away(!) - and was just waiting for CONFIRMATION.

All the central bankers are circuling their wagons for the shootout at O.K. Corral - there in the Wizard of OZ - AKA Washington, D.C. with the NEW "JOKER!" :thumb.aspx::signs14::111::111::111::36_3_16:

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

what is it, $10 a day for jury duty ? i'd say each of those jurors should be paid one Morgan silver dollar for each day they serve on the jury.

for educational reasons related to the pursuit of justice & homemade apple pie.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

And "IMAGINE letting your FATE being decided by 12 fools that can NOT get out of JURY DUTY?"

:111::111::111::111:

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

last time i got called for jury duty, it was a meth case. the prosecutor was this big heavy guy, OK we will use the word, though not wanting to offend anybody, he was fat. and tall. the 300 pounds ballpark.

the accused was some middle-aged guy with a beard, still had most of his teeth. it was a meth possession case.

what i said was, i think your drug laws are bullshit. DISMISSED.

what i wish i had said was, "i notice that prosecutor Jones is a hefty guy. It looks like he self-medicates using food. now he wants us to consider the case of another guy who self-medicates using meth. If prosecutor Jones is so concerned about public health, why doesn't he take a look in the mirror ?"

or something like that.

:bull-smile:

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

So the prosecution's argument is that you shouldn't believe what the government says about the value of its money.

I'm ok with that.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Never thought I'd say this, but I wish I were on the jury. I would even pay to be a juror in this case. I'm fuming just thinking about this matter. Blind leading the blind!

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Businessman who paid in gold and silver coin found guilty of tax fraud

<!-- begin content -->Submitted by cpowell on Sat, 2009-08-15 14:57. Section: Daily Dispatches By Joan Whitely
Las Vegas (Nevada) Review-Journal
Saturday, August 15, 2009

http://www.lvrj.com/news/53287717.html

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.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Can't beat city hall and their UNENDING ON THE PAYROLL attorneys can YA?

:111::111::111:

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

I hope they remain free men until the end of their lives...by whatever means are necessary.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

So when I get a $1000 paycheck and get it cashed into those new "golden dollar" coins, can I claim the metal value for my wages? I.e. the coins are intinsically worth 4.8 cents each, so 1000 of those coins would have a metal value of $48. Can I claim my wages as $48 based on the metal content, ignoring the stamped monetary value?

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Absolutely brilliant. Also, what about the fact that copper pennies are worth more than one cent? If I get paid in pennies, wtf am I supposed to do?

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Why not ask for FRNs, and claim the intrinsic (printing) value of those? About $6.20 per $1000.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

You are supposed to be a good citizen and voluntarily turn yourself in as a criminal.:sarc:

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

I wonder if Kahre paid minimum wage (in coin stamped value)? Minimum wage is currently $7.25/hr. (was less last year).

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

He screwed up by not being consistent. They were able to nail him using the face value when paying wages and the metal value when purchasing items.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Based on what I've read so far, I would have voted guilty also. What was he doing converting the coins to paper money at market right there? It didn't occur to him that this would represent a massive loophole to evade taxes? His action also shows that he was really paying these people in paper money, did he offer his services to anyone else? No. There are many people here who would gladly exchange paper money for silver or even silver for paper money at spot without any spread or fees. Had he made this service available to everyone, he'd lose a lot of money so he didn't. There is no intent to do anything other than scam the government and evade taxes. If he had just paid everyone in silver or gold and left it to them to convert elsewhere if they wanted to, then he would have a claim that he believed in only dealing with "lawful money". But he didn't so the whole operation looks very shady.

As for Jury duty, it's every citizen's duty to go, though I admit the most recent summons I did not attend. I should have done so like the other times in the past. I've never served on a jury because all I've had to do is call on the day I was supposed to serve and I was told I wasn't needed each and every time. Still, we need people who can make good and rational decisions. We also need average Americans and the views they hold. There is a reason why a JURY OF YOUR PEERS is written into the Constitution. A lot of these laws are open to different standards, such as indecency, and the system is designed so that power remains with the people. Government cannot make laws that society disagrees with, ultimately, it's the jury who decides if the person has done wrong according to the morals and standards of that jury. That's why it's important to have average Americans serve, so that they can decide what justice is. I feel bad for not paying attention to the last summons, I won't do it again.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

The people who used Swiss accounts to evade taxes should be prosecuted, but they have an opportunity to come clean. Basically, any tax evader can report himself to the government and face only the usual penalties on lateness and interest without any criminal punishment. You must report before the IRS opens an investigation on you though. Right now, lawyers are advising anyone who has evaded taxes through Switzerland to immediately report themselves and confess.

I don't like the high taxes we have to pay, but every person should pay what they owe in taxes. It's not right to leave the burden to honest individuals, we all know SOMEONE HAS TO PAY. Thanks to tax cuts and so forth, nearly 50% of all income tax filers pay nothing in taxes, or else get a check back from the government. I think this is a bad idea. The poor should pay some minimal amount of tax, even just $50 or $100 so that they will have incentive to care about how tax money is spent and if taxes should be raised. Otherwise, why would they care if taxes are raised again and again? Why would they care if tax money is wasted? We can't have so many Americans not involved in the tax system. It also sets up the potential for mob rule, that if 50% of the populace doesn't pay taxes, they could just keep on voting to increase taxes on the minority and use that to pay for their own benefits. That would destroy our country and our "Democratic" system. This is exactly what happens in Africa and why there are so many civil wars and such. Whoever wins uses the government to enrich their own tribe and take from the losers. Of course that isn't fair and the losers rise up in rebellion and another war starts. If Americans start voting based on what they can get instead of ideals, then our country will fail. That's why it's important for everyone to convince others that taxes are already too high, even if they don't pay much in taxes themselves. American democracy works only because people vote for the best idea/philosophy, not for what will be given to them.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Some people believe, on credible moral, ethical, and constitutional grounds, that "what they owe" is ZERO.

I pay the full amount of what the IRS orders me to at gunpoint, since, at this time, it's not worth fighting the battle to avoid immoral Federal taxes.

If someone has the cojones to ignore the IRS thugs, then bravo to them!

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Sorry, but the people consented and agree to an income tax. Should a referendum be put today, I believe well over 66% of the people would vote to institute an income tax. There's no question 2/3rds of Congress would vote yes, and 3/4th of the States would ratify so I believe the question if whether a legitimate amendment was passed is moot.

Abraham Lincoln said that a democracy cannot work if the minority refuse to submit to the majority every time they disagree with an issue. If the minority can just refuse to go along when the people have voted, then there can't be a government, an Union, or democracy in any of its forms (like representative democracy as we have here). Our system can only work if people accept that their point of view lost and go along with the wishes of the majority.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

We're not supposed to be a "Democracy."

This is one of the things about which Abraham Lincoln was wrong.

"Democracy" is like two wolves and a sheep getting together to vote on what's for dinner!

In our Republic, it is supposed to be that the wolves defend the rights of the sheep just as vigorously as they do their own.

But on the to the subject of the "face" value if fiat money.

Now that the "courts" have decided that one type of fiat money is not the actual value the treasury stamped on it, just how are we supposed to tell which fiat money is real fake money and which fiat is fake fake?

BTW, you smell a lot like a shill, or at best a very very eager sheep.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

They probably would accept it, if just like today they had no knowledge of where their income taxes go.

If they were somehow informed and knew that 100% of their income tax money goes to a private banking consortium to pay a fraudulent debt then I wonder what they would choose to do.

But of course income taxes pay for the roads (fuel taxes or private tolls apparently don't), they pay for the hospitals (private health care provided by private health provider corporations who paid to build the hospitals apparently don't), they pay for the primary and high schools (ok, you might have me on that one but not on Universities).

So I wonder what people would choose if they knew the truth of income taxes... which of course were 100% voluntary in 1942 and before.

And if someone resists in an attempt to show the truth then jail them, because sheeple can't handle the truth.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

They can't have it both ways, but it won't keep them from trying.

Should be interesting to see how this plays out in our Republic. Excellent reminder for all, btw!

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

When? Where?


Excellent!

Since we have a REPUBLIC (as Skyvike pointed out), where the rights of a minority are protected, the minority can and should refuse to go along with outrageous & immoral policies.

Lincoln, like the other crooked lawyer from Illinois, can kiss my ass.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Just what rights are protected is important. If the minority can just refuse to follow or obey any law or decision they don't like, then basically it's a waste of time to even decide by representative democracy (aka a Republic) or democracy.

This was the line reasoning Lincoln used to explain why States could not leave the Union and why war was justified. If the South had not made the first move and attacked an Union fort, it's interesting to speculate what would have happened. Few were eager for war, so forcing Lincoln to make the first move and attack into the South might have weakened his case and the support of Northerners. Regardless, like I said in another topic, might is right and so the South lost the war and the argument. Today, no State has the right to leave the Union should they disagree with some law or policy passed by Congress. They might be able to leave if the other states aren't willing to use force, but they have no justification for ignoring laws passed by the majority of other states. Same here, you can't just ignore whatever law you don't like. Since I believe the income tax amendment was passed lawfully, and continues to have widespread support, you have no justification and no right to ignore this law.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

I'm glad you understand that.


Lincoln was a TYRANT. Lincoln lost the "consent of the governed" (citizens of the CSA). In so doing, he became a dictator over them, and we all know dictators always find "justification" for war.


The South may have lost the war, but they never lost the moral authority. Besides, I'm a California boy, born and bred, and so I never "lost the war."


"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Unless Lincoln amended the Constitution relevant to the Tenth Amendment, the right to secede remains.


The Founding Fathers did, when they implemented the Declaration of Independence.

And it's not a matter of "ignoring laws one doesn't like." It's ignoring laws that are immoral and unjust.


Your "belief" is irrelevant.


Evidence for this?


"When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation....He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance....For imposing Taxes on us without our Consent..."

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

What a load of hogwash!

The Constitution represents the VOLUNTARY joining of the states into the "United" States. It says NOWHERE in that document that states cannot leave the union. And no, the Congress (the only whorehouse in the country that loses money) can't just pass a law forbidding secession either. Try reading "Marbury vs. Madison" sometime.

One state has the right to defend itself from attack by another, and maybe they even have the right to ask the Federales for help but NOWHERE in the Constitution does it give the Federal Government the authority to FORCE any state to remain in the Union.

And here's the most arrogant post I've seen on the forum for a long time:

So I should obey a law because YOU believe it's lawful or Constitutional?

Who made you the final arbiter?

And who defines, "Widespread support"??? You? What a load of CRAP. Submission to the awesome force of the STATE does not constitute "Widespread support."

Neither I nor anyone else has to justify their actions to you.

You not only smell like a shill, you smell like a fascist as well.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

Your retort to this shrill shill is much better than mine.

Nice work.

Re: PAYROLL CONSPIRACY CASE: Jury gets income tax case
 

That's exactly right, but it's the "moral obligation"deception that lulls people into the false belief that paying taxes is "to support the country" or to "provide services" etc. 100% of personal income taxes go to pay international financiers. So, we see the truth: if there was no Fed, personal income tax could be abolished and the government revenue stream would not drop, since they weren't receiving that money to begin with.

To understand how the country could operate without the Fed and personal income tax, people first have to understand what and who the Fed is, and how it plays it's Monopoly money game.