Soldotna slope worker convicted of tax evasion

  • By DAN BALMER
  • Sunday, October 5, 2014 9:47pm
  • News

A Soldotna man was convicted of seven federal tax crimes in U.S. District Court in Anchorage last week.

James Back, 60, a North Slope worker employed by the Alyeska Pipeline Service Co., was found guilty of filing false income tax returns from 2006 to 2008 and for failure to file his returns from 2009 to 2012, according to an Oct. 2 release from U.S. Attorney Karen Loeffler.

Back, who represented himself at trial, worked as a pipeline technician at Pump Station 1 in Prudhoe Bay.

After three days of trial, evidence showed Back earned more than $125,000 in wages during each of the prosecution year, but falsely claimed his wages were zero from 2006 to 2008. From 2009 to 2012, Back failed to file, according to the release.

Back contributed more than $140,000 to a retirement plan, had investment accounts worth hundreds of thousands of dollars, owned property in the Kenai Peninsula Borough, and purchased more than $400,000 in gold and silver bullion during the prosecution years, according to the release.

Back argued “taxation was immoral and unfair, and he refused to submit to it anymore,” according to the release.

Despite applying for the Alaska Permanent Fund Dividend each year, he argued the check was not taxable. Back ignored prior warnings from his employer, supervisor, the Internal Revenue Service and a U.S. Tax Court judge, according to the release.

Witness testimony linked Back’s scheme as similar to one used by Peter Hendrickson of Michigan who wrote a book, “Cracking the Code” which promotes the “zero wages” tax evasion scheme. In 1992, Hendrickson was convicted of failure to file tax returns and firebombing a Michigan U.S. Post Office in 1990 and served 21 months in prison, according to federal court records.

Chief U.S. District Judge Ralph Beistline described Back as “unrepentant” and his crimes as “flagrant.”

“Using schemes and tactics intended to willfully conceal income from the IRS isn’t tax planning, it’s criminal activity,” said Special Agent Teri Alexander with the IRS Criminal Investigation. “There is no secret formula that can eliminate a person’s tax obligations. The verdict reinforces our commitment to every American taxpayer that we will identify and prosecute those who use abusive scams designed to evade the payment of taxes.”

Back was remanded to the custody of the U.S. Marshal to await sentencing, which is scheduled for Dec. 16.

Back faces up to three years in prison on each of the three false return counts and a maximum of a year in prison on each of the four counts of failure to file.

Reach Dan Balmer at daniel.balmer@peninsulaclarion.com

More in News

Two snowmachine-triggered snow slabs are seen below the weather station of Seattle Ridge in Turnagain Pass on Dec. 3, 2021. (Photo courtesy of Chris Flowers and the Chugach Avalanche Center)
Multiple avalanches in Turnagain Pass reported Friday

The center reported Saturday that current avalanche danger was considerable above 1,000 feet and moderate below 1,000 feet.

The logo for the Kenai Peninsula Borough School District is displayed inside the George A. Navarre Borough Admin Building on Thursday, July 22, 2021 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
School district changes COVID policy for close contacts

The policy went into effect on Nov. 29

This 2010 photo shows the soon-to-be-replaced Tustumena come into Homer after spending the day in Seldovia. Gov. Mike Dunleavy announced on Saturday the state would be replacing the ferry. The replacement vessel has not yet been named, and a statewide contest will be held to name the new vessel, Dunleavy said. (Homer News File)
State moves ahead with replacement of Tustumena

The state has other plans for updating the marine highway.

A sign urging COVID-19 mitigation measures hangs at a free vaccination clinic at the Y intersection of the Kenai Spur and Sterling highways, on Tuesday, Nov. 30 in Soldotna, Alaska. (Clarion file)
Omicron variant spurs travel restrictions locally, nationally

It’s still unclear if the omicron strain is more dangerous than other COVID variants.

Commercial fishing and other boats are moored in the Homer Harbor in this file photo. (Photo by Michael Armstrong/Homer News)
Seawatch: Bycatch becomes hot issue

Dunleavy forms bycatch task force.

Junetta Delong browses the shelves at the Soldotna Library Friends’ book and art sale at the Soldotna Public Library on Saturday, Dec. 4, 2021. (Camille Botello/Peninsula Clarion)
‘Something for everyone’

Library holds art and book sale fundraiser

Danny Dommek takes photos with Santa at Soldotna Creek Park on Saturday, Dec. 4, 2021. (Camille Botello/Peninsula Clarion)
‘And to all a good night’

Soldotna celebrates Christmas in the Park

The badge for the Kenai Police Department (Clarion file)
Walmart briefly evacuated after bomb threat

The investigation is ongoing.

The new Homer Police Station, as seen Thursday, Sept. 24, 2020 in Homer, Alaska. Members of the Homer Police Department officially moved into the building on Thursday. (Photo by Megan Pacer/Homer News)
K-9 trooper team finds lost girl

A 12-year-old girl, poorly dressed for the elements, ran away from her downtown Homer home.

Most Read