A North Slope worker employed by Alyeska Pipeline Service Co. was convicted Thursday of multiple tax crimes after defending himself in federal court in Anchorage.
According to the U.S. Attorney's Office District of Alaska, 60-year-old James R. Back was found guilty of six federal tax crimes after a three-day trial. The jury reached its decision after less than an hour of deliberation, said chief criminal division prosecutor Kevin Feldis.
Back, a Soldotna resident, worked as a pipeline technician at Pump Station 1 in Prudhoe Bay for over 30 years, according to federal court records.
He filed false tax returns from 2006 to 2008, and he didn't file returns from 2009 to 2012, according to the U.S. Attorney's Office.
Trial evidence showed Back earned more than $125,000 for each year he filed the false tax returns, but he claimed he'd made nothing, the court records say.
He also contributed more than $140,000 to a retirement plan, had investments worth hundreds of thousands of dollars, owned real estate on the Kenai Peninsula and bought $400,000 in gold and silver bullion, according to the U.S. Attorney's Office.
"Back represented himself at trial and argued to the jury that taxation was immoral and unfair, and that he simply refused to submit to it anymore," the attorney's office said in a news release.
Despite having applied for the Alaska Permanent Fund dividend each year, Back argued the annual check isn't taxable. He also argued that there is no evidence that state or federal laws apply to him, though he'd been warned by his employer, the Internal Revenue Service and others that his arguments were "frivolous," the news release says.
Defendants infrequently represent themselves in federal court, said Feldis.
"But it does happen more frequently in cases such as this one, where people are protesting taxes or the government's authority to tax them as citizens," he said.
Federal prosecutors likened Back's actions to a scheme encouraged by Peter Hendrickson, a Michigan man who runs the website Lost Horizons. The website tells its visitors "the liberating truth" is that "the income tax is a benign, Constitutional tax that simply doesn't apply to the earnings of most Americans." Hendrickson also wrote the book "Cracking the Code," which promotes the "zero wages" tax evasion method. The government previously prosecuted Hendrickson in 1992 for filing false tax returns and firebombing a Michigan post office. He served 21 months in prison but was sentenced again in 2010 for similar tax crimes.
"The kind of argument that Mr. Back made has been routinely rejected by courts and juries in other cases around the country," Feldis said.
Back has yet to be sentenced. His prison term will be decided on Dec. 16. He faces up to three years for each false tax return charge and up to a year for each of the four years he failed to file.
Chief U.S. District Judge Ralph Beistline described Back's crimes as "flagrant" and said he shows no regret for his actions.
Back was taken into the custody of the U.S. Marshals following the trial.