Snipes to Feds: Let's Make a Deal

Thu., Nov. 2, 2006 2:00 PM PST by Josh Grossberg

Is Wesley Snipes ready to pay the piper?

A Justice Department spokesman told E! Online Thursday that the government has been working with the Blade star's lawyers on a deal in the actor's multimillion-dollar tax fraud case.

"We have been in contact with his representatives and are making progress as far as getting him to return to the U.S to face criminal charges," said Steve Cole of the U.S. Attorney's Office in Tampa, where the indictment was filed. "No timetable has been set."

Snipes is currently in Namibia filming the horror flick Gallowwalker. Although there is a warrant out for his arrest, the African country does not have an extradition treaty with the United States.

Meanwhile, Cole said his office was "not confirming or denying" a report in Thursday's Daily Variety that Snipes had reached a settlement with the Internal Revenue Service, which would keep him out of the big house and churning out B-grade action thrillers for years to come.

Per the trade paper, Snipes will supposedly surrender to authorities when he returns to the States in December but won't be locked up. The report claims the actor has agreed to make good on millions of dollars in back taxes; in exchange, federal prosecutors purportedly have agreed to allow him to continue working to erase his debt.

Snipes' manager, David Schiff, declined to comment on the report.

The 44-year-old actor was indicted Oct. 17 for attempting to scam the IRS out of $12 million in fraudulent refunds from 1996 to 1997. Additionally, the actor was accused of not filing any returns from 1999 to 2004.

Prosecutors say Snipes conspired with two men, Eddie Ray Kahn and Douglas Rosile, to swindle the government using a discredited scheme known as the 861 Argument.

Kahn is the founder of two defunct organizations, the Florida-based American Rights Litigators and Guiding Light of God Ministries, which the indictment claims "promoted and sold fraudulent tax schemes." He had hightailed it to Panama following the indictment but was tracked down earlier this week and appeared at a bond hearing in a Florida federal court on Wednesday.

Rosile, an accountant for Kahn, turned himself in Oct. 17 and was released by a federal judge in Ocala. Prosecutors say Rosile and Kahn have a history of filing false tax returns to obtain huge windfalls for their clients, of which they'd collect upwards of 20 percent.

All told, Snipes faces charges of conspiracy to defraud the IRS, presenting a fraudulent claim for payment to the IRS, as well as six counts of failing to file income tax returns—and a warrant was issued for his arrest. If convicted on all charges, the actor could receive up to 16 years in prison.

Following the indictment, the feds immediately obtained a warrant, claiming they didn't know the actor's whereabouts. Days later, as Snipes was spotted working in Namibia, his lawyers reportedly began talks with prosecutors to try and resolve the case by suggesting a repayment plan. (For those playing the home game, it's the same strategy used by Willie Nelson to get him out of tax trouble several years ago.)

In any event, Snipes' tax problems are not expected to cause any disruptions to the Gallowwalker shoot.

Once that project wraps, the actor, who once essayed a fugitive in 1998's U.S. Marshals, is set to reverse roles and play an FBI agent hunting for a drug kingpin in Southeast Asia in Chasing the Dragon, a $16 million action flick scheduled to shoot in Thailand in January. Snipes is also producing.