A Lancaster County man was convicted of obstructing the Internal Revenue Service and failing to file tax returns on Tuesday after not filing his taxes for decades.
James Kerr Schlosser, 59, of Bird-in-Hand, purposely stopped filing federal income tax returns in 1995. Schlosser, a manufacturer's representative for companies that sold medical equipment and surgical devices to various health care providers, had accrued approximately $2.3 million from 1994 to 2014.
Schlosser faces up to five years in prison, a fine of $450,000 and the cost of prosecution. United States District Judge Jeffrey L. Schmehl is scheduled to sentence Schlosser on June 10, 2017.
Acting United States Attorney Lou Lappen said Schlosser testified in his own defense during the trial. Schlosser told the jury that he refused to file tax returns because he concluded that the use of a social security number represented the "mark of the beast" alluding to a passage in the Bible.
"The legality of our income tax laws has been challenged time and time again and the courts have consistently upheld these laws," said IRS Criminal Investigation Acting SAC Gregory Floyd.
"Convictions, like the one returned against James K. Schlosser, send a loud and clear message that regardless of their opinions, people who willfully defy the tax laws will be fully investigated, prosecuted, and subjected to the full punishment of the law for their actions."
Schlosser had tried to revoke his American citizenship and social security number, in addition to declaring himself a sovereign human being to shield himself from federal income taxation, even though he earned an income, according to the U.S. Department of Justice.
To hide his income, Schlosser tried to assign his earnings to multiple foreign business trusts and corporate entities he created and registered with the Nevada Secretary of State.
To obtain the money, he entered into contracts with Nevada-based mail forwarding services that sent the income from the foreign trusts and corporate entities to Schlosser in Pennsylvania, and to others he convinced to act as trustees for one or more of the foreign business trusts, according to the DOJ.
After obtaining the money, Schlosser deposited it into non-interest earning investment accounts he established at two investment companies, the U.S. attorney's office said. Schlosser also purchased gold coins from at least four coin dealers, which he then converted to cash through multiple purchases.