Ogden attorney Jean Babilis is two-times lucky after a federal jury acquitted him on five counts of tax evasion.
Babilis' accountant, Thomas Harkness, was also acquitted of two similar counts.This is the second time Babilis has stood trial on the charges. Last summer, a jury failed to reach a verdict after a three-week trial.
Attorney Max Wheeler said the government had a weak case against Babilis from the outset.
"They were so single-minded in having to get him convicted that I think they overlooked obvious defenses to their case," Wheeler said.
The government changed its case this time around, using a different method of showing that Babilis allegedly underpaid his taxes. The government thought the second method would be clearer to jurors and take less trial time, said Assistant U.S. Attorney Jeff Brein-holt.
"The jury has made its decision. We stand by that," said a disappointed Breinholt.
Wheeler believes the government may have prosecuted Babilis so aggressively because of his outspoken personality.
"Jean Babilis can be a controversial figure. He's a strong personality and sometimes says things that offend people." When the IRS began looking into Babilis' taxes, he may have said some things that raised investigators' ire, Wheeler said.
"Whatever he's done, he's been punished well beyond anything that is justified. This case has taken five years out of his family's life and put him under tremendous pressure," Wheeler said.
The government charged Babilis with tax evasion for not reporting income, gifts and services paid for by several restaurants Babilis was part owner of. The restaurants paid for Babilis' nanny, improvements on his home, European travel, some of his law office expenses and leases on luxury cars.
But Wheeler convinced the jury that the services and gifts were payment on $600,000 in loans Babilis and his family made to the restaurants. Loan payments aren't taxed, Wheeler told the jury.
Harkness was charged with two counts of preparing false tax returns after he refused to testify against Babilis, said Neil Caplan, Harkness' attorney. "They wanted him to cooperate and he refused because he thought Jean Babilis was not guilty. He feels totally vindicated. He and his family are glad the whole ordeal is behind them."
Babilis still has one more ordeal in front of him. The Utah State Bar is seeking his disbarment for allegedly stealing $78,659 from a dead client's estate. The matter is scheduled for trial in the spring.