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Crime & Courts

Federal judge finds ‘flagrant government misconduct’ in tax-evasion prosecution of Big Lake doctor

PALMER - Three federal prosecutors face potential sanction after a federal magistrate found “flagrant government misconduct” in a 2016 tax-evasion case against Mat-Su cancer doctor Larry Lawson.

Lawson, accused of evasion linked to millions of dollars in charitable contributions over a four-year period, would face no jail time under a proposed plea agreement moving through a separate court process.

U.S. District Court Chief Magistrate Judge Deborah M. Smith directed that federal trial attorneys Tim Russo and Lori Hendrickson and assistant U.S. attorney Retta-Rae Randall be referred to the Office of Professional Responsibility in the Department of Justice for review and appropriate disciplinary action, according to an order filed last Wednesday.

Smith also directed that two Internal Revenue Service agents -- group manager John Williamson and special agent Jacqueline Siegel -- be referred to the Treasury Inspector General for Tax Administration and the IRS Internal Affairs Division for review and appropriate disciplinary action.

Smith sealed a 69-page order providing more details on the government’s misconduct in part “because it includes information of a personal nature about individuals who are neither defendants nor government agents,” she wrote.

The filing last week came after a three-day evidentiary hearing.

The magistrate already found misconduct in the case. The government in January notified the DOJ Office of Professional Responsibility of that finding.

The three prosecutors were removed from the case last year, according to the law firm representing Lawson, California-based Bienert|Katzman.

Lawson agreed to plead guilty to one count of willful failure to pay a tax for the year 2009 in exchange for no fines or prison time, according to a preliminary agreement filed in mid-February. The plea deal hasn’t been approved yet.

The Big Lake resident is one of two physicians at Midnight Sun Oncology, a cancer and blood-disorder treatment center at the Valley’s only hospital, Mat-Su Regional Medical Center. Lawson, a fossil and artifact collector, also gained notice in 2010 when he opened a short-lived dinosaur museum in a Wasilla strip mall.

He owed more than $1.5 million in personal income taxes that year, the agreement says, but paid the tax in full by October 2011.

Many of the issues in the investigation of prosecutors and IRS agents stem from a 2012 break-in at Lawson’s airplane hangar by Williamson, according to filings in the case.

Williamson thought his girlfriend left him to be with Lawson, according to a closing brief filed by the defense in September.

Williamson used a passcode to enter Lawson’s hangar, but Siegel didn’t take the appropriate steps after investigating, according to sworn narrative from a retired IRS special investigator. That’s despite another IRS officer’s contention Williamson “had animosity towards Lawson” because they both dated the same woman and because he couldn’t provide for the woman financially the way the doctor could.

Then prosecutors made “false and misleading statements” about the break-in, including to the judge, and during an evidentiary hearing obstructed the defense team’s “search for the truth about the break-in” and falsely claimed that no documents about it existed, according to the brief.

Lawson’s attorneys also contend the IRS disregarded protocols designed to “ensure the integrity and fairness of their treatment of taxpayers," the brief states. They claim the agency also didn’t tell him about the tax deficiencies in his case or give him a chance to pay his outstanding taxes despite the fact “his tax preparer was notorious within the IRS Anchorage office for filing error-filled returns and even though Dr. Lawson had a history of paying the taxes he owed.”

The magistrate in her order last week found “serious misconduct” on Williamson’s part and called Siegel’s investigation “seriously flawed,” according to the filing notice. That, in turn, made it difficult to judge how Williamson’s misconduct influenced the investigation and prosecution of Lawson.

Russo and Randall engaged in “reckless disregard” of discovery requirements while Hendrickson acted intentionally and willfully, the order stated. “Ms. Hendrickson was evasive, misleading, and untruthful in several statements she made to the Court and defense counsel about discovery matters.”

Lawson’s attorney, Ariana Hawbecker, said Lawson would not be available for interviews.

A spokeswoman for the U.S. Attorney’s Office in Anchorage said the agency had no comment Monday, citing Smith’s order last year instructing both sides to refrain from making any statements to the media that might prejudice the case.

An IRS spokeswoman couldn’t immediately respond to the accusations against the agent and supervisor.

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