Government waiting to destroy porn, auction buildings

[directfiesta]

Porn mogul's plea shut X-rated shops in Austin and across Texas.

AMERICAN-STATESMAN STAFF

Wednesday, December 29, 2004

The big yellow sign along the Interstate 35 frontage road is painted red where the words "Adult Video" used to be. The windows and door of the store between Braker and Rundberg lanes are boarded up while rows of adult material inside gather dust.

Federal agents, who closed the business, are waiting for a judge's order that will let them empty the store and others like it across Texas, ]b]destroy the sexually orientated contents[/b] and auction the building.

Those would be the the final steps of a federal case that Austin police detectives began nearly a decade ago. In the mid-1990s, they noticed what Mark Marshall, the lead assistant U.S. attorney on the case, has described as "financial irregularities" in the business operations of John K. Coil, who owned porn shops throughout the Southwest.

Federal agents eventually took over the investigation and unraveled the multistate operation Coil ran from Highland Village, a Dallas suburb.

In June, Coil and his son pleaded guilty to federal tax fraud and obscenity charges and agreed to forfeit dozens of Texas properties to the government.

Coil, 62, was sentenced to five years and three months in prison in September. His son, John A. Coil, 24, was sentenced to probation.

Later that month, federal agents ordered employees out of the stores in Austin, San Antonio, Houston, Dallas and other cities, changed the locks and shuttered the doors and windows.

"A big part of doing battle against crime, especially criminals who make a lot of money in the criminal process, is to be able to take away the property and the money that they have accumulated through their illegal acts," said U.S. Attorney Johnny Sutton, whose office prosecuted Coil. "One, it's punishment . . . and two, it cleans out numerous hardcore Triple-X-rated stores."

In addition to the store on I-35 in Austin, Internal Revenue Service agents closed an adult video store farther north on I-35 just south of FM 1325 in Round Rock and one on Texas 71 in far eastern Travis County.

Federal agents have closed 16 stores across the state, according to a spokesman with the Bureau of Immigration and Customs Enforcement. In all, the government plans to seize about 40 pieces of property, including land, stores, offices and homes, worth about $8 million, according to the U.S. attorney's office.

Agents are waiting for a final forfeiture order from Senior U.S. District Judge Harry Lee Hudspeth in Austin before emptying the stores and auctioning the properties off.

Under the plea deal, Coil will get to keep properties in Arizona and New Mexico, which include adult video stores, and the merchandise from his stores in the Houston area.

The videos and other merchandise from the stores in Austin and the rest of the state will be trucked to a warehouse in a yet undetermined place and destroyed by a private contractor, said IRS Special Agent Gary Gallman.

First, Hudspeth must rule on a motion by attorneys for Charles Phelps Jr., a business associate of Coil who also pleaded guilty in the case. Phelps, 48, claims he owns part of some of the properties and never agreed to forfeit property as part to his plea agreement, his lawyers have argued in court motions and hearings.

Federal prosecutors say he has no claim to the properties.

Phelps was sentenced to 3 1/2 years in prison after pleading guilty to conspiracy to defraud the United States. Phelps' son and Coil's wife, daughter and son were each sentenced to three years probation in the case. Curtis Wayne Castro, another associate, was sentenced to one year in prison for tax evasion. Coil and Phelps are free on bail while they appeal.

Coil is a former lawyer who built his empire across the Southwest over three decades. He has compared an adult video store on the side of the highway to a religious symbol and has said the case against him is an example of the government infringing on his free-speech rights and the rights of adults to choose what they do in their own homes.

Coil's obscenity conviction ? for transporting the movie "Nympho Bride" for sale ? was the first in Austin in at least 15 years. He was also convicted of mailing a fraudulent tax return.

Other charges were dropped, but Coil admitted that he skirted about $4.5 million in taxes by transferring ownership of his companies to a series of corporations and trusts for his children, many of which didn't file tax returns, federal prosecutors said. He also skimmed money from his businesses and failed to disclose income on tax returns he did file, the prosecutors said.


http://www.statesman.com/news/conten...12/29porn.html

red: color of the devil ....

Should have runned ENRON....

[modF]

While I am pretty proud to live in a blue state, I would not say that a guy who is doing shady shit on taxes and everything else is cause to blame the government for this. If I remember correctly there were some other dealings in this case as well that were not above level.

[Entropy]

I live in Austin and it is by FAR the most liberal city in Texas. These guys would've gotten shut down if they ran a church. They were crooks.

[MetaformX]

I wouldnt quite put it the way your title sais

[directfiesta]

Originally Posted by MetaformX

I wouldnt quite put it the way your title sais

Not my title. but the newspaper title....

[Shoehorn!]

Originally Posted by modF

While I am pretty proud to live in a blue state, I would not say that a guy who is doing shady shit on taxes and everything else is cause to blame the government for this. If I remember correctly there were some other dealings in this case as well that were not above level.

Yeah, just because it was a porn shop that got shut down for tax evasion or whatever doesn't mean that they government is waiting to destroy porn.

[xclusive]

Porn is not going anywhere tax evasion is much different from freedmom of speech...