Tax Evasion—Richard Hatch

Inaugural Survivor winner Richard Hatch has been indicted by a grand jury in Rhode Island on ten counts of tax evasion and defrauding charitable contributors.^[1] It is alleged that Mr. Hatch was awarded over $1,000,000 for winning the reality television contest, having two tax returns prepared, but never filing them.^[2] He is also charged with failing to report the value of a Pontiac Aztec given to him as part of his Survivor prize, $326,540 in appearance fees, $28,104 in rental income, and $36,500 in charitable donations which he used for his personal expenses.^[3]

The indictment states that he is charged with two counts of tax evasion, one count of filing a false S-Corporation income tax return, two counts of wire fraud, four counts of mail fraud, and one count of bank fraud.^[4]

Tax Evasion and False Tax Returns
The three tax-related counts are punished under 26 U.S.C. § 7201. Section 7201 states that any person who willfully attempts to evade or defeat any tax is guilty of a felony.

Violating this section can be punished with a fine of up to $500,000, imprisonment for up to five years, or both. The defendant will also have to pay the costs of prosecution.

Wire Fraud
Wire fraud is criminalized by 18 U.S.C. § 1343, which makes it a crime for a person to devise a scheme or artifice to defraud and then use the wires, radio, or television to carry this fraud out.

A violation of section 1343 can result in a fine up to $1,000,000, imprisonment for up to 20 years (30 if a bank is involved), or both.

Mail Fraud
Mail Fraud, criminalized by 18 U.S.C. § 1341, is similar to wire fraud, but instead of using the wires to carry out the fraud, the mails are used.

The punishment for a violation of section 1341 is a fine of up to $1,000,000, imprisonment for up to 20 years (30 if a bank is involved), or both.

Bank Fraud
We have recently discussed bank fraud here.

---

[1] United States Attorney, Press Release: Grand Jury Charges “Survivor” Winner Richard Hatch with Tax Evasion and with Defrauding Charitable Contributors, Sept. 8, 2005, available here.
[2] Id. at 1-2.
[3] Id. at 2.
[4] Id. at 3.