PROVIDENCE -- Survivor star Richard Hatch has been indicted on
charges of tax evasion and fraudulently using charitable donations for
personal expenses -- six months after he backed out of a plea agreement
on related charges.
A 10-count indictment handed up today by a federal grand jury alleges
that the Newport corporate consultant – who was awarded more than $1
million as the winner of the popular reality TV series’ first season –
failed to pay taxes on that income, as well as income from a radio
program, rental income and charitable donations he allegedly used for
himself.
If convicted on all charges, Hatch, 44, could face a maximum of 73 years
in prison and $3.1 million in fines.
In March, Hatch walked away from an agreement with the U.S. Attorney's
Office that would have exposed him to a much shorter prison sentence and
fines.
He will be summoned to appear for arraignment in U.S. District Court,
Providence.
The grand jury alleges that Hatch failed to report about $1,037,000 from
Survivor in 2000 and 2001, including a Pontiac Aztec valued at $27,074 and
given to him as part of his Survivor prize.
It also alleges that Hatch failed to report $326,540 that Entercom,
Boston, LLC paid him in 2001 for appearances on the Wilde Show, a
radio program on WQSX-FM; $28,104 in rental income in 2000 and 2001 from
his property at 21 Annandale Road, Newport; and $36,500 in charitable
donations to Horizon Bound.
Hatch allegedly set up Horizon Bound as a charity and accepted those
donations but used the money for his personal expenses. The indictment
charges Hatch with a scheme to defraud in connection with those
contributions, allegations that he did not face when the U.S. Attorney's
Office charged him via criminal information in January.
U.S. Attorney Robert Clark Corrente announced the indictment during a
brief press conference this afternoon at his office in downtown
Providence. He was joined by Rebecca Sparkman, special agent in charge
of criminal investigations at the Boston office of the IRS; Jerry
Sullivan, chief of the U.S. Attorney's criminal division in Providence;
and Assistant U.S. Attorneys Andrew Reich and Lee Vilker, who put
together the case against Hatch.
Sparkman said, "The IRS's top enforcement priorities include
discouraging and deterring under-reporting of income by high income
taxpayers and misuse of tax-exempt organizations."
"Paying taxes is not a game and today's 10-count indictment reflects the
IRS's commitment to enforce the tax laws," she said.
Hatch apparently shopped around for the best tax return that he could
get for the year 2000.
According to the indictment, a Newport accounting firm prepared a 2000
tax return for Hatch, including $1,010,000 he received in in August 2000
for Survivor, and concluded that Hatch owed $441,501 in taxes.
The grand jury alleges that Hatch never filed that return. The
indictment goes on to say that, in December 2001, Hatch hired a
Middletown accountant to prepare another 2000 return for him. That
return, which also included the Survivor income, concluded that
Hatch owed $234,807.
The grand jury alleges that Hatch never filed that return. In the fall
of 2002, according to the indictment, Hatch asked the Middletown
accontant to prepare a 2000 return that did not reflect the Survivor
income. The accountant did that, but cautioned Hatch that the return, calling
for a $4,483 refund, was for "informational" purposes only and was not
to be filed.
The indictment alleges that Hatch did not heed the accountant's warning
and filed that return with the IRS. The indictment charges Hatch 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.
These charges were lodged six months after Hatch backed out of a deal to
plead guilty to tax evasion charges. The charges against Hatch at that
time, two counts of filing false income tax returns, each carried a
maximum of five years in federal prison and a $250,000 fine.
As part of that plea agreement, prosecutors then said they would
recommend "a term of imprisonment at the lowest range of sentences for
the offense."
The U.S. Attorney's Office had filed those charges via criminal
information after reviewing the case for probable cause. When Hatch
backed out, the U.S. Attorney's Office asked a judge to dismiss the
charges and said it would bring the case to the grand jury for review.
Most recently, Hatch has been a featured member of the cast of Battle
of the Network Reality Stars, a six-part TV series that began in
mid-August on Bravo.
ARTICLE TOOLS: 
