Richard Hatch, tax fraud and alcoholism
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What could “Survivor” winner Richard Hatch be thinking?
Top Story: Connecting the dots from alcoholism to income tax fraud.
The commission of fraud is a criminal act in which the perpetrator wields power over others through deceit and guile. Since over 80% of criminals are alcohol and other drug addicts, this one behavioral clue ups the odds of alcoholism from our starting point of 10%, where we know nothing about the person, to at least 80%. The larger the target, the greater potential for ego inflation. The commission of income tax fraud is not, then, just another form of deception. An attempt to prove that one is more powerful than a government – especially the U.S. Government – is a particularly good indication of a mindset suggestive of one who thinks he or she is God. It also hints at a “rules don’t apply to me” attitude, which is by itself an excellent behavioral clue to alcoholism.
Addiction to psychotropic drugs (those capable of causing distortions of perception in susceptible individuals) is characterized by erratically destructive behaviors. Often, however, courageous actions are thrown into the mix, serving to confuse observers. Many war heroes have been alcoholics, as have many spies. This makes sense only when we understand that the alcoholic’s need and ability to survive is magnified by the power of the reptilian brain, the basal ganglia, riding roughshod over the neo-cortex without the usual restraints. This may explain the ability of those we often perceive as heroic to survive, particularly at the expense of others, both in war and warlike games.
Richard Hatch, the winner of TV’s first “Survivor,” was charged in January with tax evasion for failing to report the $1.01 million he earned on the show in 2000 and the $321,000 paid to him by a Boston radio station in 2001. While prosecutors said they expected Hatch to plead guilty as part of an agreement in which they would recommend leniency, he now denies he ever agreed to a plea. His egomania seems to be getting the better of him.
The idea that white-collar criminals are alcoholics had never been seriously considered – until I introduced the possibility in my first book, Drunks, Drugs & Debits, in which numerous small-scale financial scams were described. In interviewing victims, I discovered that few had ever considered the possibility of alcohol or other drug addiction in the perpetrators of such scams, must less the likelihood that the crime was motivated by the biochemistry of the disease and the consequential need to inflate the ego by wielding power. If well over 80% of violent criminals are alcoholics, why not non-violent criminals – those having a different style of addiction – who engage in Ponzi schemes, stock manipulation and tax fraud? It turns out that the dean of con artists, Charles Ponzi, was an alcoholic (described in How to Spot Hidden Alcoholics), as was Oscar Hartzell, who refined the “Sir Francis Drake” scam (now known as the Nigerian email con) in the early 1900s.
Because misbehaviors committed by alcoholics are so wide-ranging and erratic, identifying those likely afflicted by the disease can be challenging. One addict may always pay bills on time but pick a fight every chance he gets; another rarely pays his bills but never becomes violent. As an Enrolled Agent (licensed to represent taxpayers before the Internal Revenue Service), I have seen alcoholic clients ruin relationships by cheating on their significant others, while never doing the equivalent on a tax return. That such misbehaviors are indicative of alcoholism has slipped past almost everyone, because bad behaviors seem inexplicably intertwined with good ones. Yet, serial misbehaviors in adults, regardless of whether the victim is a loved one or the U.S. government, are a symptom of alcohol or other drug addiction about 80% of the time.
Such misbehaviors include income tax fraud and other serious tax non-compliance. Non-alcoholic libertarian friends, while opposing the tax system on moral grounds, tend to err on the side of caution in reporting income and deductions. Pro-government alcoholics, on the other hand, often seem not to mind challenging the law in areas that sober individuals would consider black and white. Clients who I have had to reign in from stretching the boundaries of law, as well as those who I later suspected may have committed fraud, have almost always turned out to be addicts. Half of those filing after the extended due date (October 15) are alcoholics; rarely are multiple tax returns for three or more years prepared for a client who was not a recovering addict, or a person seriously affected by one. Reasons vary: while some seem to think they are more powerful than the U.S. government, the lives of others are simply too out of control to get around to filing returns. (The roughly 50% of post October 15 filers who are not alcoholics usually prepay plenty of tax via estimates or withholding, and are due a refund.)
Since his win, Richard Hatch has become a well-known public figure. He omitted an enormous amount of income from his tax returns and is reported to have filed the 2000 return not by the extended due date of October 15, 2001, but instead a year later. When indicted for fraud, he claimed he thought CBS withheld tax on the prize money. His attorney, Michael Minns, says that Hatch should have been classified as a CBS employee and, therefore, CBS was responsible for withholding taxes from his winnings. Hello: regardless of withholding or lack thereof, lesser mortals report their income. Minns said that it was never clear whether the prize was $1 million or $1 million minus tax. Remember that line the next time you get your first paycheck from a new employer. (What? Only $3500??? You didn’t tell me you were going to withhold $1500! I thought it was $5,000 net of taxes!) In typical “blame everyone else” alcoholic fashion, Hatch says he was “unfairly” targeted by the IRS and prosecutors and that he is “being used as an example, as a scapegoat. And I’m innocent.” Yes, and so is O.J.
Whenever a clue to alcoholism stares us in the face, our antennae need to go up and we need to start digging. A little googling turns up an arrest in April 2000 on charges of abusing his then 9-year old son, along with a conviction for assaulting his ex-boyfriend. While these were later dropped or overturned, it should be noted that a failure of the criminal justice system to prove guilt beyond a reasonable doubt doesn’t mean the abuse didn’t occur. Alcoholics commit 85% of domestic violence. Most interesting is the order by U.S. Magistrate Judge Lincoln Almond in January 2005 at his income tax indictment: Hatch must submit to periodic drug and alcohol testing. It is exceedingly unlikely that one would be ordered to submit to such tests unless an alcohol or other drug problem is evident.
The best explanation, then, for Hatch’s idiotic behaviors, convoluted thinking, distortion of logic and possibly criminal behavior is that his higher brain centers are not restraining the impulses and survival instincts of the lower centers. And the answer to “just what is he thinking?” is, he isn’t.
Runners-up for top story of the month: Busy month, folks. Jeff Weise, 16, killing nine plus himself at Red Lake High School on the Chippewa Indian reservation in Red Lake, Minnesota, in the worst school shooting since Columbine. Wiese’s father committed suicide in the ’90s and his extremely abusive alcoholic mother is comatose four years after a car crash (see Myth of the Month for more). Jesse James Hollywood, described by prosecutors as the “mastermind” behind the kidnapping and murder of 15-year old Nick Markowitz over an alleged drug debt of Markowitz’s older brother in August 2000, extradited from Brazil after frequently floating “from bar to bar” picking fights, four years on the lam. Valentino Arenas, 16, sentenced to life in prison without possibility of parole for murdering police officer Thomas Steiner on the Pomona, California courthouse steps in order to impress a local gang, asking for forgiveness while admitting that if he was in his right mind, it never would have happened (his drug: methamphetamine). Convicted sex offender John Evander Couey, 46, who confessed to the kidnapping and murder of 9-year-old Jessica Lunsford. Gregory Haidl, Keith Spann and Kyle Nachreiner, convicted of sexual assault of 16-year old Jane Doe. Jane Doe’s mother, downplaying her daughter’s lies about where she was going and with whom, who claimed the lies were those of a “typical teenager.” Robert Blake jury member Roberto Emerick, publicizing a six-song recording about the trial, who engaged in a pompous and cantankerous exchange with John Ziglar of KFI-640am talk radio in Los Angeles; upon leaving, Emerick allegedly stripped the “no food or drink in studio” sign off the wall and spit “at the studio.” Michael Jackson, reported by Santa Barbara County prosecutor Gordon Auchincloss as a spendaholic” on “the precipice of bankruptcy,” with annual expenses of $35 million, annual income of only $11 million and debts of almost half a billion, including $150 million in tax liabilities. Former chess champion Bobby Fisher, given citizenship in a 42 to zero vote by the Icelandic Parliament in order to avoid extradition from Japan to the United States, calling the United States an “illegitimate country that should be given back to the American Indians.” Columnist Oliver North’s daughter Dornin Anne North, arrested for DUI after disregarding a traffic light and drifting over double lines several times at 2 in the morning; after failing several field sobriety tests, she refused to submit to a blood alcohol test, claiming she had only “one to two glasses of wine with dinner” (which would put her at a zero BAL an hour later). Roena “Emma” Hedengran, 52, and husband Gert “Abby” Hedengran, 56, accused of a host of charges in connection with the alleged escape of their Siberian tiger in Moorpark, California, later killed by trackers; a psych evaluation has been requested of Emma because “she is suspected of attempting to shoot her husband February 17 during an argument.” Former prosecutor and family man David Masters of Mercer County, Georgia, known to be “as productive as two or three attorneys put together” prior to losing re-election in 1998, accused of later abandoning clients, dead at age 52 from an overdose of cocaine. Ricky Rodriguez, son of David Berg, founder of the cult group The Children of God (later renamed The Family), for whom sexual “sharing,” even with children, was the center of his ministry; Ricky shot and killed Angela Smith, one of his childhood abusers, and then himself. Rapper Kid Rock who, after punching a DJ in the face, was apprehended by Vanderbilt, Tennessee police officer Juan Monarez; instead of giving Rock a field sobriety test, Monarez assisted in further inflating his ego by asking for an autograph. Lawyer Tamara Green, who entered a program for lawyers with substance abuse or mental health problems in October after having been charged with 12 counts of misconduct by the California bar in March 2004, accusing Bill Cosby of assault in an incident occurring 30 years ago. Singer Whitney Houston, again entering rehab. Billy Joel, 55, responsible for three car wrecks in the past three years, back in rehab after 23-year-old bride Kate gave him an ultimatum. Gene Nichols, talked into surrendering to police by recovering alcoholic Ashley Smith after killing four people near Augusta, Georgia. TV host Pat O’Brien, anchor of “The Insider” news magazine show, entering rehab and admitting “I have had a problem with alcohol.” Brenda Weathers, a social worker and founder of the Alcoholism Center for Women in the mid ’70s, dead at 68. She was apparently sober for about 30 years.
Under watch: “BTK” killer and family man Dennis Rader of Wichita, Kansas, arrested three decades after committing his first murder in a string of ten, raising a family along the way, described by neighbors as an arrogant, domineering “compliance Nazi” (he was a city inspector) who once told police that when he “wasn’t in the grip of what he called ‘the monster,’ he was a normal, everyday guy.” The “charismatic” former Connecticut Governor John G. Rowland, sentenced to a year in prison for corruption in office, whose aides steered state business to his buddies in exchange for cash, gold and lavish gifts. Former CBS news anchor Dan Rather, subject of a book by Mike Walker who claims, among other bizarre incidents, that Rather once convinced a cop to inject him with heroin, claiming it made him a better reporter (the false accusations made in the recent Rathergate scandal should raise the antennae). Telecommunications entrepreneur Walter Anderson, who has been charged with evading tax on nearly $450 million in the largest criminal tax evasion case in U.S. history. Oracle CEO Larry Ellison, whose “mercurial” management style may have caused CFO Harry You to leave the company after only eight months, creating a key void as they digest the takeover of PeopleSoft; during his 28-year reign, Ellison is reported to have fired a number of key executives, while others are said to “have been driven away by his demanding and often unpredictable ways.” As Ted Turner has proven, being a billionaire does not inoculate one from alcoholism.
Note to family, friends and fans of the above: the benefit of the doubt is given by assuming alcoholism (they are either idiots and fundamentally rotten, or they are alcoholic/other drug addicts – which would explain the behaviors). If alcoholic, there is zero chance that behaviors, in the long run, will improve without sobriety. An essential prerequisite to sobriety is the cessation of enabling, allowing pain and crises to build. Thus far, many have done everything they can to protect the addict from the requisite pain. The cure for alcoholism and consequential bad behaviors is simple: stop protecting the addict.
Special note on “Under watch:” The BTK killer (“bind, torture and kill” his victims) is almost surely an alcoholic. He’s in the “under watch” section only because I have no evidence of actual use of alcohol or other drugs, and to emphasize the fact that not one report mentioned any such use. However, his self-description is telling. Larry Ellison is mentioned because I used to say the following in pointing out that a massively inflated ego may NOT be an indication of alcoholism: “Alcoholism causes the afflicted to develop an inflated ego. Now, not everyone with a big, fat inflated ego is an alcoholic; for example, Rush Limbaugh might not be one. On the other hand, I wouldn’t be shocked.” I’ve had to replace the example with Ellison. Since his biographer fails to mention any drinking (and failed to return my inquiry), we will know only in the fullness of time.