Is Wesley Snipes really guilty of criminal tax evasion or was the star unaware of what was happening because he was the victim of bad financial management? Since Ken Starr, his former investment advisor and financial manager has been indicted for a Ponzi scheme that reflects Bernard Madoff’s crimes, shouldn’t Snipes be given the benefit of the doubt and a new trial? The serious income tax problems of Wesley Snipes could have been avoided with capable tax planning and management.
If Wesley Snipes had placed his financial management and tax planning in the capable hands of Creative Artists Management, all of these negative consequences never would have arisen. By failing to align themselves with trustworthy advisors, Hollywood celebrities have a striking tendency to fall victim to business charlatans and financial schemes that land them in hot water. In addition, the Tax Resolution Institute has helped many celebrity and ultra-wealthy clients (who always remain anonymous so their privacy is protected) out of serious tax problems and tax relief challenges.
Wesley Snipes’ attorneys are hoping his former financial adviser Ken Starr’s arrest could pave the way for a new trial on tax evasion charges that landed the star of the “Blade” trilogy a three-year prison sentence. Snipes has been seeking to have his conviction overturned, but now his attorneys want to file a new appeal based on the arrest of Ken Starr. Starr, the one-time financial adviser to Snipes and other celebrities, was charged in May with securities fraud worth $59 million. Did the IRS believe the testimony of Ken Starr, turning Wesley Snipes from the financial victim into the tax debt fall guy?
Ken Starr was a key witness in Snipes’ 2008 trial, and Snipes claims that Starr lied when he testified that he told the movie star to file tax returns and ignore the advice he got from an anti-tax outfit. Snipes’ attorneys asked the 11th Circuit Court of Appeals in a motion filed Wednesday to stop considering the pending appeal and instead allow his attorneys to file a new request to either dismiss the conviction or grant Snipes a new trial in light of his adviser’s arrest. The motion contends that prosecutors knew that Starr, who has pleaded not guilty, was under federal investigation for tax violations of his own when he testified against Snipes in January 2008. Defense attorneys said in the filing such an investigation damages Starr’s credibility.
The actor was convicted of three misdemeanor counts of willful failure to file his income tax returns and sentenced in April 2008 in what was considered a key victory for prosecutors who aggressively pursued the maximum penalty to deter others from trying to obstruct the Internal Revenue Service. Prosecutors say he made at least $13.8 million over three years and owed $2.7 million in back taxes that he refused to pay. And Snipes, who is free on bail while he appeals, apologized at the time and said he was an idealistic artist who was “unschooled in the science of law and finance.”
Who is Ken Starr? Until the New York money manager grabbed headlines as the alleged center of a $30 million Ponzi scheme, Starr operated in the shadows, despite an A-list client list that included Martin Scorsese, Uma Thurman and Sylvester Stallone. If anything, the flashiest thing about the 66-year-old Starr was his wife, the ex-stripper Dawn Passage and his $7.5 million Manhattan condominium with a 32-foot lap pool that Starr purportedly used his clients’ money to buy. Following a long-running investigation by the Internal Revenue Services’ criminal investigation division, Starr was arrested at his Upper East Side apartment while hiding in a closet. He is currently charged on three counts — wire fraud, fraud by an investment advisor and money laundering — and is being held without bail.
Much like Bernard L. Madoff, who is serving a 150-year sentence for bilking tens of billions of dollars from his closely knit network of clients, Ken Starr cultivated business at charity events and lavish parties, bridging the worlds of New York and Hollywood to build a star-studded client list of socialites, financiers, philanthropists, A-list actors and Hall of Fame athletes. Starr used his access to famous and powerful clients “to burnish an image of trustworthiness, leading his clients to entrust him with management and control of their financial affairs,” sometimes assuming “total control” over their financial lives. Did Snipes give Starr such control?
Why would a powerful Hollywood star allow a financial advisor to control all of their finances, setting up shell companies and making questionable investments? Although Wesley Snipes is a capable actor, there is a certain truth to his claim that he is unschooled when it comes to business. Given Ken Starr’s charm — the persuasive power of a con man — and his high-end connections in celebrity circles, it is not surprising that Snipes gave away so much control.
Unlike Ken Starr, the founders of Creative Artists Management and the Tax Resolution Institute do not mingle at parties and events with Hollywood stars and celebrities. Instead, they focus on doing the business of their jobs and focusing on their work: Secure Financial Management and Reliable Tax Planning. Yes, the goal of Creative Arts Management is to make money for our clients, but without ever placing our client’s future security at risk or in any kind of jeopardy.
In an up and down economy, wealthy clients need to know their financial interests are protected. If Wesley Snipes had ignored the pomp and circumstance of Ken Starr and made the levelheaded choice of Creative Arts Management and the Tax Resolution Institute, the star’s name would be clean. Snipes only would have been in the papers in relation to action in his movies and not criminal tax evasion
About Peter Y. Stephan
Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.