ORLANDO, Fla. – A political consultant who protested taxes for decades as founder of a group called Ax the Tax is set to stand trial Monday for allegedly axing his own taxes.
Doug Guetzloe, 57, is charged with failing to file personal tax returns for 2005 and 2006, years in which he earned a total of $375,254, according to a criminal information filed against him by federal prosecutors.
If convicted, he could face a minimum of 15 months to a maximum of two years in federal prison, according to federal sentencing guidelines.
THE MONEY TRAIL
The years cited by the government were flush years for Guetzloe's business, known as Advantage Consultants.
It received about $600,000 in 2005 and 2006 that originated with or passed through the Orlando-Orange County Expressway Authority, the Orlando Magic or an Orlando law firm used by the Magic and developers, according to public records and interviews conducted by Local 6.
In October 2006, Local 6 first revealed Guetzloe's company was paid $107,500 in toll money between 2004 and 2006 through an expressway authority subcontractor - payments arranged by the authority board's then-chairman.
In a 2007 report that Guetzloe unsuccessfully appealed to keep from public view, an Orange County grand jury called it "hush money" apparently designed to mute Guetzloe's criticism of the authority as it considered a toll increase. The tolls were eventually raised.
Guetzloe did not respond to repeated emails requesting comment for this story, but has previously denied ever exchanging his silence for money.
He also has denied receiving $100,000 in 2006 from the Magic. Team officials said they were persuaded by their attorney to spend the money so Guetzloe would muzzle criticism of their bid for a new arena, mostly funded by the public. The arena was eventually built.
Public records reveal Guetzloe's company received $508,750 in 2005 and 2006 from the law firm used by the Magic and local developers, among others. At the time, the firm, Lowndes, Drosdick, Doster, Kantor & Reed,was seeking development approvals for clients in Winter Garden and Winter Park, cities where Guetzloe was trying to affect elections.
The Lowndes partner representing those clients, Hal Kantor, would not comment on the firm's relationship with Guetzloe.
PRIOR CRIMINAL CONVICTION
One of those political campaigns led to Guetzloe's 2006 criminal conviction, for leaving disclaimers off thousands of political mailers that an appellate court called a "quintessential smear campaign."
He pleaded no contest to distributing the illegal fliers, which attacked a Winter Park mayoral candidate who opposed a development the Lowndes law firm was promoting. After the election, Guetzloe admitted he was behind the anonymous mailings, saying he spent about $15,000 of his own money in the effort to defeat the candidate. The candidate became mayor anyway and the development was never built.
One of the Winter Park project's developers was Alan Keen, the expressway authority chairman who arranged for toll money to flow to Guetzloe's firm. Keen resigned soon after the payments were exposed by Local 6, denying the public money was connected to his personal business interests.
After years of appeals - including unsuccessful attempts to have a federal judge and the US Supreme Court overturn his misdemeanor state conviction - Guetzloe last summer served his 60-day jail sentence, reduced to six weeks through good behavior.
If Guetzloe is convicted as charged of the federal tax crimes, US District Judge Gregory A. Presnell will ultimately decide his sentence, but guidelines call for a prison term of between 15 to 24 months, according to an attorney experienced in federal criminal law.
A KEY WITNESS
To help prove Guetzloe's guilt, prosecutors intend to call a key witness: an accountant Guetzloe hired in 2002 who claims she "questioned the legitimacy" of Guetzloe's 2004 tax return and warned him he could be audited, the government claims.
His former accountant also is expected to testify she warned Guetzloe in 2006 that media reports about payments from the Magic, the authority and the law firm could alert the Internal Revenue Service to Guetzloe's "possible unreported income," according to court filings.
Guetzloe has railed against taxes for decades, calling for abolishment of the IRS and co-founding a political party, the Florida Tea Party, whose constitution complains Americans are compelled to pay taxes "at the end of a barrel of a gun."
The government is asking Judge Presnell to prevent Guetzloe from arguing he is a victim of "selective prosecution," as Guetzloe claimed in a media interview last year. Guetzloe told the Orlando Sentinel then his prosecution "continues a pattern of selective prosecutorial misconduct that has been directed toward leaders of anti-tax efforts throughout the state and nation." He also said in that interview he failed to file returns on time on advice of his legal counsel.
In a motion filed Thursday, Assistant US Attorney Roger Handberg denied any selective prosecution and also asked the judge to bar Guetzloe's defense from asking the jury to find him not guilty based on "jury nullification," that is disregarding their oath to follow the law.
Handberg stated in his motion that Guetzloe's attorney objects to being prevented from arguing selective prosecution and jury nullification.
HISTORY OF TAX LAPSES
To help prove Guetzloe willfully failed to file his 2005 and 2006 returns, prosecutors plan to highlight his history of tax lapses, according to court filings.
The government claims Guetzloe failed to properly file tax returns or promptly pay all taxes owed for 12 of 15 tax years between 1992 and 2006.
From 1998 to 2002, Guetzloe paid over $170,000 for additional taxes, penalties and interest dating to 1992, 1993 and 1994, according to filings by Handberg.
In 2003, Guetzloe paid over $140,000 in delinquent taxes, penalties and interest for the years 1995 through 2001, according to federal pleadings.
For his part, Guetzloe admitted under oath in February 2011 that he had not filed tax returns for the previous five or six years. The testimony came during his trial for slander and malicious abuse of the court process - lawsuits he lost, resulting in $1.6 million in judgments against him.
He has yet to pay any money on the judgments, said Howard Marks, attorney for the man Guetzloe slandered in 2006. That's when Guetzloe urged his radio show listeners to call police on the political opponent he falsely said was "trolling for children."
The jury also found he then abused the court process by filing a baseless copyright infringement lawsuit against a woman who recorded his slanderous broadcast statements.
Court records reveal his financial disputes extend beyond the IRS: his home is in foreclosure proceedings and he is being sued for $10,000 he allegedly owes to Peg Dunmire, a congressional candidate he recruited to join the Florida Tea Party, which he founded with his former attorney, Fred O'Neal.
He is represented in the federal case by public defender Donald West.