'Survivor' winner Richard Hatch found guilty of tax evasion charges
By Reality TV World staff, 01/25/2006
Original Survivor winner Richard Hatch didn't prove nearly as persuasive with his real world jury as his reality TV version, with a federal jury finding him guilty of tax evasion for failing to pay taxes on income that included the $1,000,000 grand prize that he'd won after convincing his Survivor jury that he deserved to be crowed the champion of the popular reality show's initial Summer 2000 season.
The twelve member Rhode Island jury found Hatch, a 44-year-old Newport, RI resident, guilty of two tax evasion counts and one count of filing a false corporate return on Wednesday afternoon, returning their verdict after only about six hours of deliberations that began on Tuesday afternoon. Hatch reacted calmly to his conviction, nodding as the court clerk read the jury's verdict and waving goodbye to his family before being handcuffed and led out of the courtroom.
Although the three convictions carry a maximum prison sentence of 13 years in prison and $600,000 in fines, U.S. District Judge Ernest Torres said he expected Hatch to be sentenced to between 33 months and 41 months, with Hatch's sentencing hearing scheduled to occur on April 28. However Torres also noted that since government prosecutors now also accuse Hatch of committing perjury when he testified in his defense, the final sentence could be longer. In addition to the criminal penalties, Hatch will still have to pay his taxes on the unreported income. Deeming Hatch a potential flight risk, the judge ordered Hatch to be immediately handcuffed and taken into custody.
The jury acquitted Hatch of seven bank, mail and wire fraud charges related to the government's claims that he had misappropriated funds designated for Horizon Bound, a troubled youth charity Hatch had founded after his Survivor win.
The seven charges that Hatch was cleared included two counts of wire fraud (faxing NBC two documents containing a forged signature in order to get them to release a $10,000 charitable check that was compensation for his appearance on The Weakest Link) and four counts of mail fraud (using the mail to receive The Weakest Link payment as well as three other checks intended for the charity) that each carried a 3 year prison sentence. Hatch was also acquitted of a bank fraud charge -- a charge that could have carried up to a 30 year prison sentence and $1,000,000 fine -- for allegedly adding his own name to a $25,000 Horizon Bound donation and then depositing the check in his personal bank account.
According to The Providence Journal, the bank fraud charge is where prosecutors apparently now allege that Hatch "blatantly perjured" himself. While on the stand, Hatch -- who had previously attempted to deposit the charity check into a personal account at another bank but been told that, since it was made payable to "Horizon Bound," he couldn't do so -- testified that he didn't add his own name to the $25,000 check before taking it to a second bank where he managed to successfully deposit it into another personal checking account. According to Hatch, a bank employee with access to a typewriter must have added his name to the check after he deposited it. Prosecutors refuted Hatch's claim, and the trial included testimony from the bank teller who handled Hatch's deposit of the funds. According to her, the check was already made payable to "Horizon Bound - Richard Hatch" when Hatch gave it to her, which, per the additional testimony of one of the bank's executives, is the only reason the bank permitted Hatch to deposit the check into his personal account.
Under the federal sentencing guidelines (which are advisory but are usually followed) Torres can increase Hatch's sentence for reasons such as perjury during trial testimony or repeated acts of moral turpitude.
While cleared of the other charges, the jury found Hatch guilty on three tax evasion charges, with the jury agreeing with the government prosecutors' allegations that in addition to failing to pay taxes on his Survivor income, the one-time corporate trainer had also evaded taxes on other 2000 and 2001 income that included the Pontiac Aztec he received as Survivor's winner, $28,000 of real estate rental income, and $327,000 that he earned during a Boston radio show co-host stint that followed his Survivor win. In addition to finding him guilty of evading taxes by filing false personal income tax returns for both 2000 and 2001, the jury also found Hatch guilty of filing a false 2001 corporate tax return for Tri-Whale Enterprises, Inc., a Hatch-owned corporation through which the Boston radio station had paid Hatch most of his money.
After the verdict was announced, the prosecution requested Torres revoke Hatch's bail, deeming that the facts that Hatch had transfered his home into his sister's name, claimed to have lost an old copy of his passport, was living with an Argentinean national that he'd married in Canada whose own visa is due to expire next month, owned property in Canada, and had yet to provide a satisfactory account for all his untaxed income made him a flight significant flight risk. Torres agreed, and Hatch was immediately taken into custody.
Later, John MacDonald, one of Hatch's lawyers, told the media that Hatch lawyers were disappointed with the verdict and would immediately file an appeal based on "errors of law."
Meanwhile, Assistant U.S. Attorney Andrew Reich said prosecutors were pleased with the verdict. "Obviously, nobody likes paying taxes, but we all have to pay our fair share," said Reich.
According to one juror interviewed by The Associated Press, the jury believed Hatch's claim that although he'd signed documents indicating he was responsible for paying any taxes on his Survivor income and also received a Form 1099-MISC in which it was made clear that no taxes had been paid on the income, Hatch had "legitimate questions" about who was responsible for paying his Survivor taxes.
But even if they bought Hatch's excuse that he thought either CBS or the show's production company had somehow already paid his taxes, the jury members felt he'd "crossed the line" by not reporting his radio show and rental income. "Even if you take the Survivor money out of there, there was still a lot of evidence," Robert Paquette, a 43-year-old juror from West Greenwich, RI, told The AP.