PROVIDENCE -- They were no longer living together. But when Ralph Magee visited Richard Hatch from Philadelphia soon after his ex-lover had won $1 million on Survivor, a paper caught his eye.
Sitting on a desk top was a document about Horizon Bound, an outdoor adventure program for teens that Hatch was telling people he was starting. On it appeared Magee's name.
"I said whatever you are doing, I do not want to be involved. He said OK," Magee testified yesterday in Hatch's tax-evasion trial in U.S. District Court.
It wasn't until years later when Internal Revenue Service agents questioned him in Philadelphia that Magee learned that Hatch had apparently signed Magee's name to documents establishing Horizon Bound and which identified him as a director of the nonprofit charity.
"Did you ever serve as a director of Horizon Bound?" asked Assistant U.S. Attorney Lee Vilker.
"No," replied Magee. When asked about one particular Horizon Bound document identifying him as a treasurer, Magee said, "It's my name, but it's not my signature."
Prosecutors maintain that Hatch took more than $35,000 in donations for Horizon Bound for making a variety of celebrity appearances. But instead of using the money for charitable purposes, he spent it on personal expenses and never paid taxes on it, they allege. Hatch is also accused of evading taxes on the $1 million he won on the reality TV show Survivor in 2000 and hundreds of thousands of dollars of other income from that year.
He is charged with tax evasion, filing false income tax returns and wire, bank and mail fraud.
Yesterday, prosecutors asked witnesses questions that sought to undermine the credibility of Horizon Bound.
Lee Strauss, a vice president for business affairs for NBC, testified that Hatch appeared on the game show The Weakest Link in exchange for the network making a $10,000 donation to Horizon Bound. Strauss said Weakest Link asked Hatch for proof that Horizon Bound was a bona fide charity. He said that Hatch sent a federal tax form, signed by Magee and Paul Mello, which indicated that Horizon Bound was not subject to tax withholding.
Gerald Leggett, an NBC accountant, said he sought further proof that Horizon Bound was legitimate. He called a phone number in Newport and said he spoke to someone who identified himself as Ralph Magee. Leggett said he asked for a letter on Horizon Bound letterhead. The letter, he said, arrived several days later from a Green End Avenue address where Hatch lived at the time.
Magee, who by then was living in Philadelphia, testified that he never spoke to anyone at NBC or sent documents to the network.
"I had no role in Horizon Bound," he said.
Under questioning by defense lawyer John E. MacDonald, Magee acknowledged that during his seven-year relationship with Hatch, his domestic partner had talked about revitalizing Horizon Bound, which had existed many years ago and which Hatch had credited with helping him through a difficult youth. He also said that Hatch had hired someone to help establish the charity.
"Did you ask him why your name was there?" MacDonald asked.
"He said he wanted to get a charity started and he needed two other people he trusted," Magee said.
Prosecutors, who allege that Hatch intentionally kept his Survivor winnings and other income off his 2000 tax return, called two accountants as witnesses.
Richard Plotkin, a certified public accountant from Newport, said that he supervised the preparation of a 2000 tax return for Hatch, as well as one for 1999, which was overdue. Hatch's legal team has suggested that Hatch questioned whether CBS should have withheld taxes from the checks it sent him. But Plotkin said Hatch never raised that issue with him.
"It was clear from our meeting that it was taxable," he said.
Plotkin said the return for 2000, indicated Hatch owed $374,000 in taxes, on income of $1,166,000.
"It was evident that it might be difficult for him to pay the taxes at that time," Plotkin recalled.
Plotkin said he offered alternatives on how Hatch might deal with the problem, such as arranging to pay the owed taxes in installments or liquidating some of his assets. The accountant said that Hatch declined an offer for the firm to mail in the return, saying he would file it himself.
A second accountant, Jodi Rodrigues Wallis, said that Hatch came to her Middletown office in 2001 asking for help with his 2000 tax return. She said she knew at the time that Plotkin had prepared a 1999 return for Hatch, but not one for 2000. Hatch, she said, wanted to part company with Plotkin and said he didn't want her to contact his firm for any information.
Assistant U.S. Attorney Andrew J. Reich asked her about various sources of income Hatch had shown to Plotkin. She said that many of them Hatch never showed to her. He did cite the Survivor income, but said he thought that CBS might be picking up the cost of the taxes. She said he needed to claim the income since it was reported to the IRS as not having been taxed.
The income declared on the return prepared by Wallis, including the Survivor winnings, was nearly $700,000 less than the one prepared by Plotkin. She said that Hatch picked up the return instead of having her mail it. Wallis will continue testifying this morning.
rsalit@projo.com / (401) 277-7467
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