Thursday, February 19, 2004

Court finds tax preparer
guilty on 23 fraud counts

A state Circuit Court jury has convicted the owner of a local tax preparation service of 23 tax fraud counts, including attempting to evade taxes and first-degree theft.

Richard Basuel, who remains free on bail, faces 10 years in prison when sentenced May 12. He declined comment on Tuesday's verdict.

Basuel represented to his clients that wages earned in Hawaii were not subject to taxation under state and federal law, and therefore they were entitled to a refund of all their withholding taxes, said Deputy Attorney General Rick Damerville.

The charges stemmed from Basuel's preparation of tax returns for five people for tax years 2000 and 2001.

Defense attorney Jerry Wilson argued that Basuel was simply passing on to his clients what he had learned during his research of the tax laws and later amended tax returns as needed.

Basuel, 62, who has refused throughout his trial to respond to the court's questions -- including claiming he is not Richard Basuel -- told the court in an about-face Tuesday that he wanted to represent himself and answer the court's questions.

Over the objections of Damerville, who said Basuel was simply playing games with the court, Basuel was allowed to give his own closing arguments.

Separately, a federal grand jury indicted Basuel, his son Richard Basuel II and three former employees of RB Tax Service last week on 148 counts of preparing false federal tax returns and aiding and abetting in the preparation of false tax returns. The scheme allegedly resulted in more than $4 million in falsely claimed federal tax refunds.

RB Tax Service was at one time one of the largest tax preparation companies in the state with offices in Kalihi and Waipahu.

Basuel previously served six months in state prison after his July 2001 conviction for filing false tax returns claiming Hawaii as a foreign country and overstating his clients' itemized deductions.


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