Tax preparer guilty of fraud, theft charges

By Curtis Lum
Advertiser Staff Writer

A Circuit Court jury deliberated for about four hours yesterday before finding a 62-year-old man guilty of multiple counts of tax fraud.

Richard J. Basuel was found guilty of 11 counts of attempting to evade taxes, 11 counts of aiding or abetting the filing of false or fraudulent tax returns, and one count of first-degree theft. Basuel faces up to 98 years in prison and fines of more than $2 million when he is sentenced by Circuit Judge Michael Wilson on May 12.

Basuel prepared state tax returns for clients in 2000 and 2001 and claimed their wages were not subject to taxation under state and federal law, the state attorney general's office said. Basuel is a "devotee" of Larken Rose, a tax protester who produced a video that misinterprets the Internal Revenue Code and holds that wages are not taxable, the attorney general said.

The attorney general said Rose's argument has been debunked by courts nationwide. Hawai'i has excluded the misinterpretation of the code from applicability under state law.

A federal grand jury last week indicted Basuel and four other employees of a tax service on charges of obstructing the Internal Revenue Service. The indictment says the five promoted a "new way" of preparing returns for clients, disguising income earned in Hawai'i as foreign earned income and reporting adjusted gross income of zero.

Reach Curtis Lum at 525-8030 or at culum@honoluluadvertiser.com.