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John L. Smith On IRS Fraud, And His Role As A Hipster Movie Star

The IRS is the agency you pay taxes to, and that most of us are only aware of around April 15.

But IRS Criminal Enforcement Unit was made famous as the federal agency that took down Al Capone.

It's caught its share of mortgage fraudsters and ponzi schemers over the years. But it's been out of the limelight.

Now, the Trump Administration is seeking to contract the federal workforce, and the IRS - hated by politicians on the right - will likely be a prime target.

Does that mean the fraudsters will be given free reign?

John L. Smith thinks it just might be.

"If you were to gut the IRS tomorrow, it would only benefit... the folks who perpetrate fraud on the public," said Smith.  "The challenge is - in fat times and lean times in America - is no one gets elected or re-elected saying the IRS needs more funding." 

Lots of cases have originated from Las Vegas. One was the Cay Club ponzi scheme. Led by Frederick David Clark, the scheme sold and resold the same vacation rentals in Las Vegas and Florida. The IRS caught Clark and he was sentenced him to 40 years in prison a year ago.

In 1995, the IRS had 3,300 special agents in the criminal division. Today the agency has 2,200 agents. Many of them are dealing with offshore companies, and working with better technology.

"The bottom line is, if they don't work these cases, who's going to catch the fraudsters that are going to make your taxes higher?" said Smith.

Better Week for Bundy Prosecutors

John L. has been covering the first of three trials related to the 2014 standoff at the Bundy Ranch. This trial covers Bundy supporters who came from other states - with their weapons.

Previous testimony by agents from the Bureau of Land Management have, in Smith's opinion, been pretty well challenged by the defense. But this week saw a turn in that testimony.

Sargeant Tom Jenkins, who was in charge of the riot detail on the ranch, testified that "he had officers with tears in their eyes, who were literally concerned for their safety and the safety of their fellow officers, because of the dramatic number of guns."

Sheriff Joe Lombardo testified that he felt intimidated seeing all the loaded weapons around him.

"He said he was highly concerned. It was clearly a very dangerous moment," said John L.

"Both witnesses said one backfire, one accidental discharge of a firearm - with hundreds of firearms around - and there goes a shootout."

This refutes a defense argument that shows video of seemingly jovial and relaxed Metro agents talking with protesters.

Hipster John at SXSW

John L. didn't spend his entire week at the Bundy trial. He spent part of his week hanging with the hipsters at South By Southwest in Austin, Texas.

He was there for the premiere of the documenatry film Nobody Speak, by Brian Knappenberger.

The focus of the film is the Gawker/Hulk Hogan case that put Gawker out of business. But part of the film is about the secretive way the Las Vegas Review-Journal was purchased.

And John L was interviewed for the film, which has gotten a Netflix distribution deal.

John L. Smith, contributor 

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(EDITOR'S NOTE: Carrie Kaufman no longer works for KNPR News. She left in April 2018)