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An author of books on how to avoid paying income taxes and four associates were convicted by a federal jury Monday of conspiring to obstruct the Internal Revenue Service through the promotion and sale of bogus trusts that prosecutors said netted the defendants more than $8.5 million.
Lynne Meredith, 54, who ran an organization called We the People, and her chief assistant, Gayle Bybee, 56, both of Sunset Beach, were taken away in handcuffs after the verdict was returned. Prosecutors contended they were serious flight risks.
Meredith, a flamboyant figure who owns a 1972 Corvette convertible bearing the license plate TAX REBL, launched We the People in 1991 after becoming convinced, she said, that Congress did not have the power to levy taxes on private citizens.
Also convicted of felony charges but allowed to remain free pending sentencing were Gregory Karl, 54, of Solana Beach and Willie Watts, 45, of Murrieta, both of whom are former certified public accountants; and Teresa Manharth Giordano, 39, also of Murrieta, operator of a paralegal service.
U.S. District Judge Dean Pregerson set a June 3 hearing to consider defense motions to throw out the convictions on various procedural and constitutional grounds. Sentencing is scheduled July 23.
In March, a federal grand jury in Las Vegas indicted Irwin Schiff, the country's most widely known tax rebel, and two of his associates. Schiff, author of "The Federal Mafia: How it Illegally Imposes and Unlawfully Collects Income Taxes," was charged with conspiracy to defraud the United States by helping others file false income tax returns. Last year, however, federal prosecutors were handed a defeat in their war on tax protesters when a jury in Memphis acquitted Vernice Kuglin, a commercial pilot and tax protester charged with tax evasion and willful failure to file tax returns. Kuglin testified that she had written numerous letters to the IRS asking the agency to specify the law requiring her to pay income taxes.
She never received a reply, a crucial fact that jurors cited in explaining their acquittal verdict.
Schiff told the judge in the case that he would plead guilty if the government could prove that there is a law requiring citizens to pay income taxes; indeed, he claims the law says this must be voluntary, with the only requirement being an obligation to file. The judge didn't accept the prosecution's effort to obtain a guilty plea