Pilot Charles Davis indicted

[Demosthenes]

_______________________________________________________________________________
FOR IMMEDIATE RELEASE TAX
WEDNESDAY, MAY 25, 2011 (202) 514-2007
WWW.JUSTICE.GOV TDD (202) 514-1888

NORTH CAROLINA PILOT INDICTED FOR FILING FALSE TAX RETURNS AND OBSTRUCTING THE IRS

WASHINGTON – Charles Alexander Davis formerly of Mooresville, N.C., was indicted by a federal grand jury in Charlotte, N.C., on 10 counts of willfully filing materially false tax returns and one count of obstructing and impeding the Internal Revenue Service (IRS), the Department of Justice and the IRS announced. The indictment was returned on May 19, 2011, and was unsealed today in U.S. District Court for the Western District of North Carolina.

According to the indictment, Davis’s employer, an international airline carrier, withheld little or no federal income tax from Davis’s wages for years 1997 through 2005 because Davis previously had falsely represented that he was exempt from income tax withholding. The department said, in April 2006, Davis filed five fraudulent amended income tax returns for 1996 through 2000, falsely claiming that he earned little or no adjusted gross income in each of those years.

The indictment further alleges that subsequently, from April 2008 to February 2009, Davis filed five fraudulent individual income tax returns for 2004 through 2008, reporting false amounts of federal income tax withheld for each of those years and requesting fraudulent refunds from the IRS in amounts up to approximately $1.5 million. During IRS efforts to collect Davis’s tax debt, the indictment alleges, Davis obstructed and impeded the IRS in numerous ways, including submitting fraudulent payment documentation to the IRS and concealing his assets and income in a nominee bank account.

Davis had his initial appearance on May 20, 2011, in Puerto Rico, where he was apprehended.

If convicted, Davis faces a maximum potential sentence of 33 years in prison and a maximum fine of $2.75 million. An indictment is merely an allegation, and Davis is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.

The case is being prosecuted by Assistant U.S. Attorney Jenny Grus Sugar and Tax Division Trial Attorney Kevin C. Lombardi. The case was investigated by the IRS-Criminal Investigation Division.

More information about the Department of Justice’s Tax Division and its enforcement efforts can be found at www.usdoj.gov/tax.

# # #

[LPC]

Skipping the trial and verdict, and going right to sentencing:

FORMER US AIRWAYS PILOT SENTENCED IN NORTH CAROLINA
TO 10 YEARS IN PRISON FOR TAX FRAUD

MONDAY, SEPTEMBER 10, 2012

WASHINGTON -- Charles A. Davis, 63, formerly of Mooresville, N.C. was sentenced today in U.S. District Court to 120 months in prison for committing tax fraud, the Justice Department and Internal Revenue Service (IRS) announced. U.S. Judge Richard L. Voorhees in the Western District of North Carolina also ordered Davis to serve twelve months of supervised release after his prison term and pay $538,569 as restitution to the IRS.

Following a three-day trial in March 2012, a federal jury convicted Davis of 10 counts of filing false tax returns and one count of obstructing the IRS. According to evidence presented at trial and court records, from 1983 through 2011 Davis was employed as a commercial airline pilot for US Airways. From 1996 through 2007, Davis failed to file timely income tax returns despite receiving wages ranging from $129,950 to $190,510. For years 1997 through 2005, Davis's employer withheld little or no federal income tax from his wages because Davis previously had falsely represented that he was exempt from income tax withholding.

Trial evidence established that in April 2006, Davis filed five fraudulent amended income tax returns for 1996 through 2000, falsely claiming that he earned little or no adjusted gross income in each of those years. And from April 2008 to February 2009, Davis filed five fraudulent individual income tax returns for 2004 through 2008, reporting false amounts of federal income tax withheld for each of those years and requesting fraudulent refunds from the IRS in amounts up to approximately $1.5 million. The evidence also established that during the time he failed to pay his taxes, the defendant drove a Ferrari and a Mercedes, and lived in a lakefront home on Lake Norman, N.C.

According to trial records and today's sentencing hearing, during the IRS's efforts to collect Davis's tax debt, Davis obstructed and impeded the IRS by submitting fraudulent payment documentation to the IRS and concealing his assets and income in a nominee bank account. Davis also used a fraudulent address in Texas to avoid paying state income taxes, and currently owes the North Carolina Department of Revenue in excess of $150,000.

In handing down the sentence, Judge Voorhees emphasized the egregious nature of Davis's conduct and Davis's lack of regret and remorse.

According to filed documents and today's sentencing hearing, Davis also took various steps to avoid IRS levies on his US Airways payroll account and his bank accounts, including filing for bankruptcy and diverting funds to his 401(k) account.

"Those who flout the tax laws by filing fraudulent tax returns, hiding assets, and obstructing the IRS risk criminal prosecution resulting in conviction and imprisonment, as well as being required to pay the taxes owed, with interest and penalties," said Kathryn Keneally, Assistant Attorney General of the Justice Department's Tax Division. "The Tax Division remains committed to prosecuting tax defier conduct throughout the United States."

"Today's lengthy sentence of longtime tax scofflaw Davis should send a message to those to seek to evade taxes," said U.S. Attorney for the Western District of North Carolina Anne Tompkins. "Our office aggressively investigates and prosecutes those who attempt to cheat our tax system."

"Davis used a foundation of fraud and deceit in order to cheat the government," said Richard Weber, Chief, IRS -- Criminal Investigation. Those who engage in tax schemes to evade payment of taxes will be prosecuted no matter how they try to hide the truth."

Davis has been in local federal custody since his conviction in March 2012. Upon designation of a federal facility he will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.

Assistant Attorney General Keneally and U.S. Attorney Tompkins commended the efforts of special agents of IRS -- Criminal Investigation, who investigated the case, and Tax Division Trial Attorney Jonathan R. Marx and Assistant U.S. Attorney Jenny Grus Sugar, who prosecuted the case.

[Famspear]

....Davis failed to file timely income tax returns despite receiving wages ranging from $129,950 to $190,510......

.....For years 1997 through 2005, Davis's employer withheld little or no federal income tax from his wages because Davis previously had falsely represented that he was exempt from income tax withholding.....

......Davis filed five fraudulent amended income tax returns for 1996 through 2000, falsely claiming that he earned little or no adjusted gross income in each of those years.....

.....Davis filed five fraudulent individual income tax returns for 2004 through 2008, reporting false amounts of federal income tax withheld for each of those years and requesting fraudulent refunds from the IRS in amounts up to approximately $1.5 million.....

.....Davis obstructed and impeded the IRS by submitting fraudulent payment documentation to the IRS and concealing his assets and income in a nominee bank account.......

.....Davis also used a fraudulent address in Texas to avoid paying state income taxes....

.....Davis also took various steps to avoid IRS levies on his US Airways payroll account and his bank accounts, including filing for bankruptcy and diverting funds to his 401(k) account.....

Well! At least we have to give the guy credit for creativity -- for not sticking to just one boring method of big time cheating. Variety is the spice of life!



Have a good time in the slammer, Mr. Davis!

[wserra]

The guy's a sovrun too. It's been a while since we had a dose of authentic frontier gibberish, and Davis filed plenty.

Davis wasn't even arraigned when he filed this notice purporting to appoint the Court as his "trustee" and demanding "compensation" of $150,000 for the privilege. The minutes of the initial appearance are quite entertaining. Davis insists he wants someone named Kenneth-Ray:Foust as his "counsel", the M-J realizes the guy isn't a lawyer, and a brouhaha ensues. Another one ensues when Davis insists he doesn't understand the simplest things, which the M-J eventually (clearly correctly) concludes is bullshit.

As the case goes on, Davis makes at least twenty sovrun filings. A sampling: he revokes all "powers of attorney" to the state, the feds, the IRS, the Fed, and the "Director of the Bureau of Vital Statistics" (don't ask me, the guy's a wacko). He gives fellow sovrun Foust a "Self-Executing Specific Power of Attorney". He files an "Affidavit of Specific Negative Averment in Support of Second Notice of Taking for Value of Public Offer for Discharge of Defendant Charles A. Davis", whatever that is (reading it doesn't help). Final example: after the jury convicts him, he moves to dismiss based on a "foreign judgment" - a UCC-1 he filed on himself in California. He no longer seeks damages for his incarceration - Davis' version of the Black Knight's "Alright, we'll call it a draw".

Why are pilots - educated and hopefully competent people - so overrepresented in the ranks of the sovrun brain-damaged? Kestrel, you probably know more pilots than anyone else here. Is it hypoxic encephalopathy?

[Kestrel]

Why are pilots - educated and hopefully competent people - so overrepresented in the ranks of the sovrun brain-damaged? Kestrel, you probably know more pilots than anyone else here. Is it hypoxic encephalopathy?

Oh I don't really think pilots are overrepresented, any more than lawyers who should have been disbarred or religious nutcases who claim a direct connection with their god.

What makes these otherwise-intelligent pilots fiscally stupid is that they know everything about flying, and are well respected for doing a job few people can do. But they never took Accounting 101 and don't comprehend why they should; that's just basic math. When you work in a profession where you only get one chance to do things right lest people die, and you perform consistently, arrogance tends to come naturally.

These particular pilots are distinguished from other sov'runs by their mobility and higher-than-average incomes; their visibility footprint is bigger. They've been to more places than most people ever dream of going, and been exposed to more different cultures and ideas than most people can imagine. Free airfare is a nice employee benefit.

That's not saying all pilots make higher-than-average incomes. Typically they don't. The biggest thing which kept pilots on Air Force active duty since the late 1980s was that commercial airline jobs were hard to come by and didn't pay as much.

A few quotes about pilots, only partially in jest. Enjoy.
-- Truly superior pilots are those who use their superior judgment to avoid those situations where they might have to use their superior skills.
-- The Navy pilot, despite his sometimes swaggering exterior, is very much capable of such feelings as love, affection, intimacy and caring. These feelings just don't involve anyone else.
-- Never ask a man if he is a fighter pilot. If he is, he'll let you know. If he isn't, don't embarrass him.
-- What's the difference between God and pilots? God doesn't think he's a pilot.

HIGH FLIGHT

Oh, I have slipped the surly bonds of earth
And danced the skies on laughter-silvered wings;
Sunward I've climbed, and joined the tumbling mirth
Of sun-split clouds...and done a hundred things
You have not dreamed of...wheeled and soared and swung
High in the sunlit silence. Hov'ring there,
I've chased the shouting wind along, and flung
My eager craft through footless halls of air.
Up, up the long, delirious, burning blue
I've topped the windswept heights with easy grace
Where never lark, or even eagle flew.
And, while with silent, lifting mind I've trod
The high untrespassed sanctity of space
Put out my hand, and touched the face of God.

[LPC]

The minutes of the initial appearance are quite entertaining. Davis insists he wants someone named Kenneth-Ray:Foust as his "counsel", the M-J realizes the guy isn't a lawyer, and a brouhaha ensues.

Anyone have any idea what an "(unintelligible) counsel" might be? From the transcript:

THE DEFENDANT: Sir, for the record, on the record, I'm here by special appearance and I was attempting to file documents before this hearing yesterday which was denied. I
had a (unintelligible) counsel help me with some documents. He drove in from Tennessee yesterday and he came over to the Mecklenburg County jailhouse to deliver and get me to sign those and have an affidavit sworn so he could file into the record --

THE COURT: All right. Well, I don't need to get into that right now....

[...]

THE COURT: Now, sir, you do have the right to be represented by a lawyer. And if you can't afford a lawyer, I'll consider appointing one for you. Do you want to be represented by a lawyer?

THE DEFENDANT: No, I don't. I request to have (unintelligible) counsel assist.

THE COURT: To have what?

THE DEFENDANT: (Unintelligible) counsel.

THE COURT: I have no idea what that is, sir, but the only thing I can tell you is the only way you're going to be represented in this court is by an attorney who's admitted to practice in this court.

[Kestrel]

I found one more quote about pilots which pretty well sums up Charles Davis' attitude:

"Any pilot who does not privately consider himself the best in the game is in the wrong game."

Yep. Arrogance to the extreme, with blinders.

(BTW, I was the 3rd seater in the airplane I flew, not the pilot. The USAF kept a 3rd person up front long after the commercial airliners dropped them. During wars you have to assume that the computers will get fried, the GPS system will go down, and the radio navigation aids will be switched off.

Sooooo, when I got out of the Air Force, I became an accountant because my military job had no civilian equivalent.)

[Kestrel]

He files an "Affidavit of Specific Negative Averment in Support of Second Notice of Taking for Value of Public Offer for Discharge of Defendant Charles A. Davis", whatever that is (reading it doesn't help).

Skip down to the bottom of the 8th page (labeled 6 of 7). Looks like this document is saying, "If you don't respond in the way I direct then you stipulate that I win by default."

[Gregg]

I wonder how much of it is not pilots in general, but former military pilots.
Most of the people I flew with were not terribly educated or even what I'd call real smart to tell the truth. And I'd like to chime in on something Kestrel said. I don't think flying is a big deal skillset, and especially modern commercial flying. I learned to fly helicopters 30 years ago (OMG I'm old) in the Army and while I will say it's a highly technical skill it's one that hasn't got any of what I'd call really hard ones. If you have the hand-eye coordination I can teach you to fly. What it does have is a very unforgiving climate. I can screw up transmissions all day long and for the most part it means a pickup truck might not have second gear. A guy who screws up a landing (which to me takes much less skill than building a valve body BTW) is gonna at least destroy a few million dollars worth of airplane, and has a better than good chance of killing from 3 to 300 people.

Anyhow back to military pilots, most of the ones I flew with were not college educated (Army pilots are mostly Warrant Officers and most of them are not college educated. The other services for the most part require a degree to get into flight training) and while not dumb, a lot of them had limited life experience outside the service. I suspect that your average airline pilot who did about 10 years military flying and then went to work flying airliners were graduate of either the Military Academies or a handful of colleges known for the aviation programs (Purdue is a very good one for instance) and they've not been outside their world either. All of Kestrel's quotes above describe to a "T" pretty much every pilot I've ever known in varying degrees. They think the skills are special and maybe I'm wrong, but having a few other hobbies and skills I really don't think so. Yes, it's a craft but honestly driving a race car is a lot more challenging to me, as is, believe it or not, flying radio controlled helicopters instead of real ones. I don't do the eggbeater thing anymore, so most of my flying is in a Cessna 182 or a 172RG, neither of which is much more than driving a car to me. I still enjoy it, but more and more I find I'm flying to just save time.

[Gregg]

Anyone have any idea what an "(unintelligible) counsel" might be?

Don't know the word used, but I'm betting the meaning is "Some fellow traveler SOv'run Nutjob who isn't admitted to prcatice law, has no legal education and doesn't know dick about courts but still knows more about the law than all the fancy lawyers and judges you think knows it all"

[Famspear]

He files an "Affidavit of Specific Negative Averment in Support of Second Notice of Taking for Value of Public Offer for Discharge of Defendant Charles A. Davis", whatever that is (reading it doesn't help).

Skip down to the bottom of the 8th page (labeled 6 of 7). Looks like this document is saying, "If you don't respond in the way I direct then you stipulate that I win by default."

That reminds me of the garbage each of us has seen pushed by tax protester-tax denier types over the years: "If you, the employees of the Internal Revenue Service, don't respond to me within 30 days, your failure to respond constitutes a legally binding default and I win" -- or similarly worded twaddle.

[wserra]

Anyone have any idea what an "(unintelligible) counsel" might be?

An unintelligible defendant deserves unintelligible counsel. It's the natural order.

[I have no more idea than did the M-J.]

[webhick]

Anyone have any idea what an "(unintelligible) counsel" might be?

If you remove the parenthesis, it makes perfect sense.

[notorial dissent]

Genuine frontier gibberish for sure.

The Self-Executing Specific Power of Attorney, if nothing else proves that Davis is a great many fries short of a happy meal. While calling it a Specific Power, is really a carte blanche for whoever this Foust person, speaking of a name to be wary of, and basically says he can do whatever he wants to and charge Davis whatever he wants to, without any check.

The rest of it is just so much, as WES so rightly puts it, genuine frontier gibberish.

[Montana Notasovrun]

Genuine frontier gibberish for sure.

The Self-Executing Specific Power of Attorney, if nothing else proves that Davis is a great many fries short of a happy meal. While calling it a Specific Power, is really a carte blanche for whoever this Foust person, speaking of a name to be wary of, and basically says he can do whatever he wants to and charge Davis whatever he wants to, without any check.

The rest of it is just so much, as WES so rightly puts it, genuine frontier gibberish.

I've seen quite a bit of this stuff. It is difficult to believe that stringing all those legal sounding words together in just the right order still doesn't work. Didn't the judge realize that Davis had clicked his heels together three times and crossed his fingers behind his back? Dang, its tough convincing Federal Judges of the error of their ways. I'm sure Davis isn't done and his "unintelligible" counsel is still out there polluting the landscape. There may be more who think they can benefit from this great advice. I hope they get wise before its too late.

[notorial dissent]

One has to do the magical incantations just so, and if you don't, then they don't work, of course, they don't work anyway, but at least they have the excuse that if only they'd just done it right then everything would have gone their way.

It doesn't much sound like the judge was buying any of it as he immediately appointed a real attorney for the bozo.

I would say it is a really good bet that there will be a whole lot more of this flotsom entered in to the court docket before this is all over and done with, all having equal effect as what has so far been filed.

[grixit]

"(unintelligible)" is probably some variation of "assistance of", "constitutional", or "common law".

[grixit]

I can think of 2 possible explanations for the "no i don't understand" ploy.

There was one sov guru once who told a story of being pulled over and hauled into court on some minor criminal charge, but was then released unconditionally because the judge realized that a person who doesn't understand cannot be tried.

Also, opne of the sovrun myths is that "understand" means "stand under". So what they are really asking if you will voluntarily agree to stand trial. If you don't then they are powerless.

[grixit]

Also, if i had been that notary i wouldn't have stamped that doc because i could not truly say that the maker had a "living-soul" or was "without the corporate United States".

[notorial dissent]

I'm not altogether sure, but I think the notary has been sipping out of the same mason jar as ex-pilot and the constetushonal council.