Citing his perjury, a federal judge adds to the penalty the Survivor star faced for tax evasion.

01:10 AM EDT on Wednesday, May 17, 2006

BY RICHARD SALIT
Journal Staff Writer

His scheming ways won him $1 million on Survivor, but yesterday Richard Hatch's lies and deceptions cost him dearly.

In sentencing Newport's reality TV star, Chief U.S. District Judge Ernest C. Torres called Hatch's explanations for not paying his taxes "preposterous" and "just incredible." Then he hit Hatch, 45, with the most punitive term he could -- more than four years in federal prison.

"I'm sorry to say that Mr. Hatch lied in his testimony to this court and he did so repeatedly," said Torres.

Hatch, in addressing the court, spoke politely, but disagreed with the judge. During his trial, he took the witness stand and testified that he never sought to evade taxes on his highly publicized Survivor winnings and other income.

"I believe I have been completely truthful and forthcoming, your honor," he said.

While addressing the judge, he wore an orange prison jumpsuit and leg irons from the Plymouth County Correctional Facility, in Massachusetts, where he has been held without bail since his conviction in January.

As Hatch listened calmly to his sentence, Torres ordered psychological counseling for him upon his release from prison.

"I think you are in a state of denial," said Torres. "I don't know whether you've convinced yourself that some of these things are true or whether you are a lot better at fabricating them than other people."

Afterward, a handcuffed Hatch awkwardly shook hands with his lawyers and smiled at and said goodbye to family and friends in the courtroom. While being led away, he called out, "I'll see you later, mom."

In 2000, the Aquidneck Island native and corporate consultant appeared on the first season of Survivor, the seminal reality TV show filmed that year on a Malaysian island off Borneo. Hatch quickly became the contestant viewers loved to hate. Openly gay and clearly in need of losing weight, he shed all his clothing in the island's tropical heat, completely exposing himself to the show's prime-time audience -- with the notable exception of the parts artfully blurred by CBS.

Hatch became infamous for his cunning and conniving ways, allowing him to avoid being "voted off" the island by fellow contestants and to ultimately take home the $1-million first-place prize and a Pontiac Aztek.

But federal prosecutors, working with the Internal Revenue Service, accused Hatch of evading taxes on his Survivor winnings, earnings from cohosting a Boston radio program and rental-property income.

In January of last year, he reached a plea deal in which he would get 18 to 24 months in jail for admitting to two counts of filing false income-tax returns. The prosecutors were going to recommend the lower end of the range, meaning he would have gotten out of jail about now, instead of beginning a sentence nearly three times as long.

But Hatch, mirroring his reality TV maneuverings, walked away from the deal. Prosecutors responded by obtaining a 10-count criminal indictment, charging Hatch with two counts of tax evasion, one count of filing a false income-tax return and multiple counts of fraud.

During the trial, Hatch took the stand in own defense. He said he was never able to verify whether CBS was going to pay the taxes on his winnings, as he was led to believe. And although he sought a tax refund of $4,500 for 2000 -- even after one accountant told him he owed $374,000 -- he said he never willfully sought to avoid paying taxes.

The return he did file was one an accountant prepared at his request -- without the Survivor income. She had him sign a document indicating it was for informational purposes only and not to be sent to the IRS.

While on the stand, Hatch contradicted the testimony of the accountants who prepared returns for him and the bank tellers and CBS officials whose testimony supported the seven fraud charges.

A jury found him guilty of tax evasion and filing false income-tax returns, but innocent of the fraud charges. These related to how he handled charitable contributions to Horizon Bound, a charity he ostensibly started to achieve his lifelong dream of helping troubled youths.

Hatch faced 33 to 41 months in prison, according to a sentencing report prepared by probation officers. But Assistant U.S. Attorney Andrew Reich requested that the range be bumped up two sentencing "levels" -- to 41 to 51 months -- for obstructing justice by perjuring himself during trial and failing to disclose to probation officials his ownership of properties in Michigan and Nova Scotia, Canada.

Torres started out by saying that "I'm always reluctant to penalize" defendants for statements they make on the witness stand in exercising their constitutional right to defend themselves. Sometimes their "memories may be faulty" or there may be no proof they are willfully obstructing justice, he said.

On the other hand, he said, a judge should "not be hesitant to increase a defendant's sentence" when his or her testimony under oath "subverts the search for truth."

"There is no question Mr. Hatch willfully gave false testimony," said Torres, who then elaborated on what he considered a half-dozen examples of such deception. "There were inconsistencies in his testimony. . . . There were exaggerations and distortions."

Michael Minns, Hatch's Texas lawyer, asked the judge to consider that Hatch had no previous criminal record, had experienced abuse as a child and had been active in the Big Brothers program.

When Torres asked if Hatch wanted to address the court, the convicted tax cheat rose and said, "Yes, sir, your honor."

"This has been a long drawnout and difficult process for me . . . ," Hatch said. "For the past year, I've done everything to cooperate in and make this tax situation or returns clear so they could be corrected."

Torres then went with Reich's recommendation of 51 months in prison, citing what he described as Hatch's "exceptional degree of calculation" in avoiding taxes and his dishonesty under oath.

"You do seem to have done some good things. You're not a bad person . . . ," the judge said. "Unfortunately, what's happened is you've taken an offense . . . and made it far worse by your testimony."

In addition to the mandatory counseling, Torres gave Hatch three years of probation and ordered him to pay whatever he owes in back taxes, interest and penalties. He opted not to fine Hatch, he said, because it would be "superfluous" given the exorbitant amount of money he will owe the IRS.

While considering a possible fine, Torres listed all of the income Hatch failed to pay taxes on.

"What happened to all of the money?" he asked Minns.

The defense lawyer suggested that some money was misappropriated by an investment company and that a large share of it has gone to accountants and lawyers that Hatch has hired to defend him.

"I think his finances are depleted," Minns said.

Torres, however, said there was always a possibility that Hatch could be making good money again when he gets out of jail.

"In this day and age, someone might invite you to make appearances or write a book," he said.

rsalit@projo.com / (401) 277-7467

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