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By Jayna Johns

A federal judge today sentenced a former D.C. nightclub owner to 38 months in prison and ordered him to pay more than $950,000 in restitution to the IRS for underreporting his annual income.

Abdul Karim Khanu, 42, of Potomac, Md., who owned DC Live, Platinum and H20, was convicted last year of tax fraud and tax evasion after skimming cash from his clubs and paying employees under the table.

U.S. District Judge Colleen Kollar-Kotelly said she believes Khanu won’t be a repeat offender. “I think that he is sincere that this conviction has definitely made an impression on him,” she said. “This is definitely a good first step.”

But, she said, she felt she needed to send him to prison. Continue Reading »

By Ben Petitto

A federal judge joined defense attorneys for 10 Colombian nationals today in trying to jumpstart a three-year-old case that accuses the men of running a drug cartel that allegedly sought to import thousands of kilograms of cocaine into the United States.

The defendants are charged with using stash houses, guns and boats in Colombia, Panama, Costa Rica, Guatemala and Mexico to carry out their operation to bring drugs into the U.S.

The men were indicted in 2007, but the process of extraditing all 10 defendants to the United States was only recently completed and was complicated because it involved the Colombian Supreme Court.

Defense attorneys said they are worried that some of their clients have been held for almost three years, testing the limits of their Sixth Amendment rights under the U.S. Constitution to a speedy trial.

U.S. District Judge Richard J. Leon said prosecutors need to “put their cards on the table” to move the case toward a trial, which he estimated could take at least three months next year. Continue Reading »

By Ben Petitto

As a U.S. Army helicopter pilot during the war in Vietnam, Allan Tanguay said he first began to believe that it was “my job and duty” to fight for America. But years later his devotion took on new meaning as he fought what he described as “Goliath,” the IRS.

Tanguay, 67, is on trial with four other men in federal court in Washington on charges that they defrauded the U.S. government by orchestrating tax defiance schemes to help taxpayers avoid paying income taxes.

According to testimony, American Rights Litigators, a Florida tax protest group, used a variety of reasons for taxpayers to avoid paying taxes, ranging from membership in an American Indian tribe to entitlement to reparations for slavery.

Acting as his own attorney, Tanguay told a jury in his opening statement today that he was fighting for what he believed—that the IRS is misusing federal law—and that he had not intended to defraud the U.S. government. Continue Reading »

By Rachel Aiken

A federal judge today imposed what she called the “largest overall fine ever” for an export violation when she ordered a U.K.-based aviation firm to pay $2 million in criminal penalties for its role in the illegal shipping of a commercial Boeing 747 aircraft from the United States to Iran.

U.S. District Judge Ellen Segal Huvelle imposed the fine that was part of a plea agreement reached in February between the U.S. government and Balli Aviation Ltd., a subsidiary of Balli Group. The deal also requires Balli Aviation to pay $15 million in civil fines.

Prosecutor Anthony Asuncion said the punishment fits the crime. “This is a very serious matter,” he said.

According to the charges, Balli Aviation conspired to export three Boeing 747s to Iran without obtaining the required export approval from the U.S. government. Continue Reading »

By Michael McGuire

Frustrating. That’s the word U.S. District Judge Richard J. Leon used to describe a case that began three years ago when another judge was duped for a day into approving the $3 million settlement of a fake lawsuit.

In a hearing this morning, defense attorney Robert Lee Jenkins, Jr. stepped aside as counsel for David Copeland-Jackson and requested that another lawyer be appointed to represent the defendant.

“Sometimes these things happen,” said Jenkins in an interview following the short-lived proceedings of the day. He said that a change of counsel may be the result of “a personality difference or a difference in legal strategy… And sometimes it can also be just a simple consequence of a defendant losing faith in his attorney.”

In August 2007, Copeland-Jackson, a convicted child molester, convinced U.S. District Judge Ellen Segal Huvelle that his accuser had recanted and agreed not to contest a libel lawsuit. Huvelle approved the settlement, unaware of Copeland-Jackson’s conviction until the following day when she was contacted by the Ashland Police Department in Ohio. Continue Reading »

By Michael McGuire

An IRS employee testified today that four men accused of orchestrating tax defiance schemes used a variety of reasons for refusing to pay federal taxes, ranging from membership in an Indian tribe to entitlement to reparations for slavery.

Shauna Henline, an IRS senior technical advisor, said the returns and claims filed by the men landed in the agency’s service center’s “funny box,” where frivolous claims are flagged and reviewed.

She testified in federal court in Washington in the case against Eddie Kahn, Stephen Hunter, Danny True, Allan Tanguay and Jerry Williamson, all of Florida.

They worked for American Rights Litigators, also known as Guiding Light of God Ministries, in Mount Dora, Fla. They are charged with conspiring to help taxpayers, for a fee of $300 to $500, avoid paying the IRS. Continue Reading »

By Ben Petitto

Pornographer John “Buttman” Stagliano wants to play in open court more than five hours of his movies so a jury won’t be biased by short clips taken out of context, his lawyers argued today in federal court in Washington.

“He’s entitled to know that a jury has viewed the whole film, not just trailers,” said H. Louis Sirkin, a Cincinnati-based defense attorney.

Stagliano, 58, his corporation Stagliano Inc., and his studio, Evil Angel Productions, face seven counts of knowingly transporting obscene matter for the purpose of sale and distribution. The charges deal with three movies, including “Milk Nymphos” and “Storm Squirters 2: Target Practice,” that Stagliano’s businesses produced and sold on the Internet and through the U.S. mail.

The case against Stagliano, a former porn star who writes, directs and produces porn films, also raises questions about the scope of the First Amendment’s protection of free speech, the definition of obscenity and the government’s efforts to police the multibillion-dollar industry. Continue Reading »