01/14/02

TAX PROTESTER PLEADS GUILTY TO FEDERAL CHARGES;

William S. Duffey, Jr., United States Attorney for the Northern District of Georgia, and Andre’ Martin, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, announce that JAMES STUART LAKE, 52, of Corona Del Mar, California, pleaded guilty before United States District Judge Charles A. Pannell, Jr., to two counts of a federal indictment on charges of failure to file. According to Duffey:

LAKE was indicted on January 10, 2001, on three counts relating to his failure to file income tax returns for the years 1994, 1995, and 1996. According to the evidence in this case, LAKE , a former U.S. Air Force Captain, was a pilot for a major airline, and lived and worked in the Atlanta area during those years. Court records show that LAKE had filed a federal court action, stating that the IRS and its rules were unconstitutional, and that he was, in fact, not a citizen subject to filing or paying required income tax. In addition, LAKE had written numerous letters directly to the IRS, claiming that his income could not be defined as wages, and as a native born American, he was not subject to the laws of Congress.

As a condition of today’s plea agreement, LAKE agreed to pay $176,000 towards his owed back taxes for 1993 through 2000. LAKE also agreed to negotiate the resolution of civil issues relating to the outstanding tax loss.

Sentencing for LAKE is scheduled before Judge Pannell on March 25, 2002, at 10 a.m.

This case was investigated by Special Agents of the Internal Revenue Service, Criminal Investigation.

Assistant United States Attorney E. Vaughn Dunnigan and Michael Yurkanin of the United States Department of Justice, Tax Division, Criminal Section, prosecuted this case.

For further information please contact William S. Duffey, Jr., United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.