Chain of adult stores to close
 

Porn moguls admit tax evasion

AUSTIN -- Dozens of adult video stores across Texas will be shut down by the U.S. government after a porn mogul and his son pleaded guilty to charges that their empire skirted millions of dollars in taxes, federal officials said.

John K. Coil, 62 -- accused of avoiding between $2.5 million and $5 million in corporate and income taxes -- admitted mailing fraudulent tax returns and transporting obscene materials.

His 23-year-old son, John A. Coil, admitted making false statements on a tax return. Both Highland Village men entered their pleas Friday in U.S. District Court in Austin.

The sprawling federal case, which was scheduled to go to trial next week, dismantled the bulk of a porn empire that Coil has built throughout the Southwest over three decades, the Austin American-Statesman reported Saturday.

Public tax records indicate Coil's son owns the 24-Hour News Stand at West Mount Houston and the North Freeway.

At least 12 of the stores listed under the name Adult Video in the local Yellow Pages list the same U.S. Post Office box number in Lewisville as the 24-Hour News Stand owned by the younger Coil.

Though they all share the same business address in Lewisville, the business owner is listed as either Rex Temple Inc. or Nobby Lobby Inc.

The local businesses include B.J.'s Adult Video at 6314 Gulf Freeway, Zone D'Erotica at 1463 FM 1960, Pinemont Video at 7700 Pinemont and Far West News and Video at 12911 Westheimer.

Employees contacted at the local stores said they had not heard that their stores might be closing.

Attorneys for both Coils could not be reached for comment Saturday. A lawyer for the elder Coil's daughter, Katherine Coil Dagnino, 35, could not confirm how many stores in Houston might be affected.

Gerhard Kleinschmidt, Dagnino's lawyer, said said the case against the family seemed to be motivated by political reasons. He also said Attorney General John Ashhahahahaha had announced the indictment against the Coils in September.

Dagnino, who lives in Dallas, kept books for the business. She entered a guilty plea to tax fraud.

Four other people, including the elder Coil's wife, have entered guilty pleas on tax fraud or evasion charges in the case. Sentencing for some of them is scheduled for August. John K. Coil faces the most severe sentence -- up to 10 years in prison.

"This case was based on religion," Coil said of the obscenity charge.

After originally seeking to seize 58 Coil-owned properties in seven states -- worth about $9.7 million -- the government agreed in plea negotiations to reduce that to just the 45 Texas properties on the list.

Those properties include houses, offices, at least two dozen adult video stores and vacant pieces of land. Prosecutors said the video stores, in cities including San Antonio, College Station, El Paso and Houston, could be closed within months.

Well I am not to far from their! I have to keep an eye out see if any close down!