Up to 10 years in prison for millionaire tax dodger

  • Article by: JON TEVLIN , Star Tribune
  • Updated: April 30, 2008 - 11:32 PM
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Mun Suk Kim, fiancee of Robert Beale, left the U.S. Courthouse in downtown Minneapolis Wednesday after Beale was found guilty on seven charges of evading taxes, conspiracy and failing to appear in court.

Photo: Jim Gehrz, Star Tribune

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A trial that at times seemed to exist in parallel universes, with accepted law in one dimension and Robert Beale in the other, came back firmly to earth Wednesday.

Ignoring Beale's indignation, religious beliefs and obscure interpretations of the U.S. Constitution and philosophy, a federal jury in Minneapolis took only two hours to find him guilty of all seven counts brought against him for tax evasion, conspiracy and fleeing authorities.

The former millionaire CEO of Comtrol Corp. in Maple Grove now faces up to 10 years in prison.

The trial in U.S. District Court lasted eight days and featured more than 100 exhibits, some about arcane tax laws.

But Assistant U.S. Attorney Timothy Rank repeatedly told jurors: "This isn't a complicated case; it is what it looks like, and it looks like tax evasion."

Rank and Assistant U.S. Attorney Michael Cheever argued that Beale deceived and conspired to hide more than $5 million in income for which he owed more than $1.6 million in taxes.

His greed and arrogance were simply cloaked in anti-tax arguments from the radical fringe, prosecutors argued.

The former North Oaks resident, who said he was once worth $20 million, fled rather than face the government in court when he was originally charged in 2006. He was captured in Florida after 14 months on the run.

The trial was attended by IRS officials, prosecutors and, on occasion, members of anti-tax groups. Beale, acting as his own lawyer, tried repeatedly to veer from the evidence against him to argue over the meaning of the U.S. Constitution and the enforcement of the tax code.

"We, the people, need to be diligent," Beale began. "Powerful people take shortcuts around the law." He then tried to reinterpret the 14th Amendment before being told to stick to the evidence.

He sat passively as the verdict was read. His fiancee, Mun Suk Kim, put her head down on the seat in front of her and cried. She later declined to comment.

In closing arguments, Rank summed up the case presented through witnesses that included former bookkeepers, employees and government agents.

From 2000 through 2004, Beale directed employees to pay him through a shell company, Chayil Corp., in order to hide his income. After the Minnesota Department of Revenue issued subpoenas for pay documents, Beale removed them from the building and stopped sending invoices. He eventually was paid through cashier's checks and sent money to Swiss bank accounts.

Meanwhile, Beale sent "nonsense" documents to the IRS and Minnesota Department of Revenue that pretended to offer financial information or challenge laws, in case his income was discovered. Those "distraction and manipulation" tactics are common among tax protesters, Rank argued.

When those attempts failed, Beale fled. While on the run, Beale, through a son, tried to get $600,000 from his Swiss bank account to buy property in Switzerland. He also filed a phoney document to have a lien removed on a seized property, which he then tried to sell.

When Beale was arrested in November at a strip mall in Orlando, Fla., he was carrying a fake passport and driver's license issued from "The Kingdom of Heaven," something he had copied off the Internet.

Last week, as Beale appeared on the tax charges, he was hit with a new criminal complaint, this one accusing him and four supporters of conspiring to disrupt the proceedings and intimidate the judge.

"God ... wants me to take the judge out, that's what he wants me to do," Beale allegedly told his fiancée on a tape-recorded call from jail. "Once I take down Ann Montgomery, no judge in the whole court will have anything to do with me."

'Twisted, evil story'

In his closing statements, Beale was by turns contrite and angry. He apologized for causing "such a waste of time and resources because of my beliefs."

Beale tried several times to argue that the U.S. Constitution identifies anyone outside the District of Columbia and U.S. islands as "non-resident aliens," but was stopped by Montgomery.

Beale also accused the government of misconstruing his motives. "To me it is absolutely amazing how you can take a set of facts and infer such a twisted, evil story," he said. "It's no wonder people are afraid."

The numerous documents he filed with the IRS and courts were frustrated attempts to debate the government on the tax code, he argued, "but nobody listens."

"I realize now that people don't want to hear this," he said.

Most of the letters and documents were written with the help of well-known tax protesters. Rank pointed out that every one of them had also been convicted of tax fraud.

Beale also tried to shift blame to his bookkeeper, Eileen Johnson, for failing to turn in the proper documents to the IRS.

But Rank showed that Johnson, after being ordered by Beale to keep financial disclosures from the government, was the person who turned him in.

"Mr. Beale talked a lot about honesty and integrity and standing up for what's right," said Rank. "We did see an example of that in this case, but it didn't come from Robert Beale."

It came, instead, from Johnson and another employee, Lee Aide, who became informants.

"We are very pleased with today's verdict," said acting U.S. Attorney Frank J. Magill. "Mr. Beale attempted to evade his responsibility and conspired to cheat the system. Tax evasion is a serious crime and our office will aggressively prosecute such cases."

Jon Tevlin • 612-673-1702

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