Posted on 11/09/2002 3:56:41 PM PST by Willie Green
For education and discussion only. Not for commercial use.
A Las Vegas securities lawyer who told a psychologist he was "blinded by the money" was sentenced Friday to eight years in a federal prison for masterminding a multimillion-dollar stock fraud and tax evasion scheme.
Max Tanner, who has been free on a $650,000 bond, was taken into custody after U.S. District Judge Kent Dawson imposed the penalty.
"I wish I were not here," Tanner said during the hearing. "I wish I were not involved in this case. I wish I had not made the poor decisions I made."
Dozens of people packed Dawson's courtroom for the 4 1/2-hour hearing, which included testimony from psychologists, character witnesses and victims.
Probation officials and prosecutors recommended a prison sentence of at least 19 years for Tanner.
Prosecutors argued that recent cases of corporate fraud, including the WorldCom and Enron scandals, "have highlighted the severe financial and emotional damage that can be inflicted on public investors and shareholders by corporate insiders who are motivated by greed and arrogance."
"In the wake of these scandals, President Bush, the Congress, political leaders and citizens alike have called for tougher penalties to individuals who commit corporate fraud," prosecutors wrote in one court document. "The facts of this case fit squarely within that mandate."
Tanner, 55, was one of five people indicted in the case in September 2000.
After a five-week trial that ended in November 2001, Tanner was convicted of all 37 counts he faced.
The charges included conspiracy, securities fraud, wire fraud, mail fraud, money laundering, tax evasion, and filing false individual tax returns.
"We believe Max Tanner was the most sophisticated and his conduct was the most egregious out of all the defendants in this case," Justice Department attorney Mark Lytle said Friday.
The prosecutor said Tanner also profited the most from the scheme.
Tanner's lawyers argued for a sentence that would allow their client to maintain his freedom. Attorney Brian Sun of Santa Monica, Calif., said Tanner already has been punished with economic and professional ruin.
Defense lawyers also argued that Tanner deserved a reduction of his potential sentence because he was suffering from a "significantly reduced mental capacity" while he committed his crimes.
They presented testimony from Mark Zelig, a psychologist who evaluated Tanner in April and determined he had suffered from a mood disorder known as bipolar disorder. Zelig concluded that the disorder played a major role in Tanner's criminal conduct.
Daniel Martell, a psychologist who evaluated Tanner for the prosecution, said he did not believe that the defendant met the criteria for bipolar disorder.
Defense attorneys also argued that Tanner came from an abusive home but revealed details of that abuse only in sealed court documents.
Dawson granted the defense request for a reduction based on a combination of factors, including sentences others have received for similar conduct.
During Tanner's trial, prosecutors proved that he was the leader of a broad conspiracy to defraud investors in the stock of Maid Aide, a Nevada corporation created by Tanner and stock promoter Dennis Evans.
Tanner paid brokers, who worked out of boiler rooms in New York City and Boston, secret cash bribes or kickbacks to induce them to sell Maid Aide stock at inflated prices.
Evans was tried with Tanner and was convicted of conspiracy, but Dawson since has granted him a new trial.
Tanner also was convicted of setting up a company called Delta Financial Resources in the Cayman Islands to hide his income and evade taxes.
Prosecutors claimed he used the scheme to avoid paying nearly $2 million in taxes on some $10 million he received from stock sales. They claimed he then used the money to buy houses, expensive cars and a speed boat.
During questioning by Lytle, Zelig confirmed that Tanner told him he was "full of greed" and "blinded by money" when he committed the acts that led to his criminal convictions.
Lytle read from Zelig's notes, which quoted Tanner as saying, "I was obsessed with making money."
Tanner, who recently has been living in Utah, has a master's degree in tax law from Georgetown University and has worked as an Internal Revenue Service lawyer.
Prosecutors said his stock scheme defrauded more than 300 investors out of nearly $3.3 million. Four of those victims testified Friday about how the losses have affected their lives.
Richard Stockton, a former Internal Revenue Service agent who lives in Florida, said he lost his life savings, more than $500,000.
"I considered suicide, but that would only end my sorrow and misery and make more for my loved ones," he told Dawson.
Cliff Hodgins, a retired CPA who lives in Washington, said he was defrauded out of $127,000.
He said the loss caused his health to deteriorate and shattered his confidence in his investing abilities. He said it also placed a strain on his marriage, adding, "How do you explain to your wife you just lost $127,000?"
Hodgins said he and his wife have been forced to come out of retirement and obtain part-time jobs.
Peter Bouchard of Illinois said he lost about $150,000 and will not be able to pay for his oldest daughter's wedding this spring.
"That's a real jolt to my dignity," he said.
Lytle argued that Tanner's fraudulent activity continued even after his convictions, when the defendant made misrepresentations about his crimes to prominent members of the community. He said Tanner made the misrepresentations in a letter asking supporters, including high-ranking members of the Mormon church, to write letters on his behalf to the judge.
More than 50 people wrote such letters. Two of Tanner's supporters, Las Vegas lawyer Jeffrey Burr and retired Clark County prosecutor Mel Harmon, testified Friday about the defendant's character.
Burr and Harmon, who now lives in Utah, both said they have known Tanner about 20 years and view him as someone who respects the law.
"He is my friend," Harmon said. "I consider him to be a moral man and to have deep religious principles."
Harmon belongs to the Mormon church. Tanner was excommunicated from the church in what Sun described as a matter related to his divorce.
When given the opportunity to address Dawson, who is also Mormon, Tanner said he hopes to regain membership in the church.
At one point during his statement, Tanner turned toward the victims and told them he would do whatever he could to repay them.
"I feel bad," he said. "I regret that I was ever involved in this transaction."
Tanner told Dawson he has received many blessings in his life, including the eight brothers and three sisters who attended Friday's hearing.
"I've let them down," he said. "I've let myself down."
Also present during the hearing was Tanner's son Daniel, one of four Las Vegas men who have been charged in San Diego County with illegally soliciting homeless people to assault each other for a notorious video called "Bumfights: Cause for Concern, Volume 1."
The video, which has angered homeless advocates, was released this spring and has been distributed worldwide.
Tanner's mother, Beverly, has made appearances on the "Late Show with David Letterman" in which she talks about baking.
Blinded by the Light
Blinded by the light, revved up like a deuce, another runner in the night
Blinded by the light, revved up like a deuce, another runner in the night
Blinded by the light, revved up like a deuce, another runner in the night
Madman drummers bummers, Indians in the summer with a teenage diplomat
In the dumps with the mumps as the adolescent pumps his way into his hat
With a boulder on my shoulder, feelin' kinda older, I tripped the merry-go-round
With this very unpleasin', sneezin' and wheezin, the calliope crashed to the ground
The calliope crashed to the ground
But she was...
Blinded by the light, revved up like a deuce, another runner in the night
Blinded by the light, revved up like a deuce, another runner in the night
Blinded by the light, revved up like a deuce, another runner in the night
Blinded by the light, revved up like a deuce, another runner in the night
Some silicone sister with a manager mister told me I go what it takes
She said "I'll turn you on sonny to something strong, play the song with the funky break"
And go-cart Mozart was checkin' out the weather chart to see if it was safe outside
And little Early-Pearly came by in his curly-wurly and asked me if I needed a ride
Asked me if I needed a ride
But she was...
Blinded by the light, revved up like a deuce, another runner in the night
Blinded by the light
She got down but she never got tired
She's gonna make it through the night
She's gonna make it through the night
------ guitar solo ------
But mama, that's where the fun is
But mama, that's where the fun is
Mama always told me not to look into the eye's of the sun
But mama, that's where the fun is
Some brimstone baritone anticyclone rolling stone preacher from the east
Says, "Dethrone the dictaphone, hit it in it's funny bone, that's where they expect it least"
And some new-mown chaperone was standin' in the corner, watching the young girls dance
And some fresh-sown moonstone was messin' with his frozen zone, reminding him of romance
The calliope crashed to the ground
But she was...
Blinded by the light, revved up like a deuce, another runner in the night
Blinded by the light, revved up like a deuce, another runner in the night
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
{the following two sections are sung simultaneously}
1) ~ Blinded by the light, revved up like a deuce, another runner in the night
~ Blinded by the light, revved up like a deuce, another runner in the night
~ Blinded by the light, revved up like a deuce, another runner in the night
~ Blinded by the light, revved up like a deuce, another runner in the night
~ Blinded by the light, revved up like a deuce, another runner in the night
~ Blinded by the light, revved up like a deuce, another runner in the night
~ Blinded by the light, revved up like a deuce, another runner in the night
~ Blinded by the light
2) ~ Madman drummers bummers, Indians in the summer with a teenage diplomat
~ In the dumps with the mumps as the adolescent pumps his way into his hat
~ With a boulder on my shoulder, feelin' kinda older, I tripped the merry-go-round
~ With this very unpleasin', sneezin' and wheezin, the calliope crashed to the ground
~ Now Scott with a slingshot finially found a tender spot and throws his lover in the sand
~ And some bloodshot forget-me-not said daddy's within earshot save the buckshot, turn up the band
~ Some silicone sister with a manager mister told me I go what it takes
~ She said "I'll turn you on sonny to something strong"
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
She got down but she never got tired
She's gonna make it through the night
Me thinks he got his CPA by mail.
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