A Case Study:
IRS ABUSE OF PASTOR TONY ALAMO

The following case is respectfully submitted for inclusion in the Senate Finance Committee hearings' records of IRS abuses of April 28, 29 and May 1, 1998. We bring to your attention the religious persecution case of Pastor Tony Alamo (Bernie Lazar Hoffman). Pastor Alamo was the subject of a twenty year IRS investigation that violated his First Amendment rights and his rights to due process under the law.

In June of 1994, Pastor Tony Alamo was wrongly convicted of filing a fraudulent income tax return for 1985 in violation of 26 U.S.C. 7206 (count one) and failing to file income tax returns for years 1986 through 1988 (counts two through four), in violation of 26 U.S.C. 7203. He was sentenced to an unduly harsh six year prison sentence, which will end in December 1998.

Recently released Freedom of Information Act (FOIA) documents (described on page 3), however, expose that Mr. Alamo, pastor of the Alamo Christian Ministries and the Music Square Church (MSC), was the victim of improper conduct by IRS investigators who went to great extremes to secure a conviction against him. New evidence proves that the IRS lied to the jury, withheld information and pertinent documentation from the defense, intimidated witnesses, and relied on unreliable witnesses and anti-religious hate organizations who had ulterior motives and used the IRS, a supposed neutral government agency, for their own ends. In addition, the IRS staged an unnecessary armed raid on church members, all citizens of this country, who were neither dangerous nor violent and did not possess arms.

The IRS unconstitutionally "determined" that Pastor Alamo's church was illegitimate, and took away its tax exemption; and then set out to "prove" that all church income was generated solely for the benefit of one person, Pastor Alamo. The IRS claimed Pastor Alamo was the "owner" of numerous businesses that were, in reality, owned by Music Square Church, and that he had diverted funds from MSC and its businesses for his own use. In order to convict Pastor Alamo, the IRS had to establish that he exerted absolute control over both the members of the church and the businesses of MSC. To prove this theory, the IRS readily adopted the language and theories of the Cult Awareness Network (CAN), an anti-religious hate organization, that attacked churches and religions that they deemed were illegitimate.

A Brief History

Pastor Alamo and his wife Susan Alamo (now deceased) built a fundamentalist orthodox Christian ministry by going out on the streets of California and preaching to young people, many of whom were drug-addicts, criminals and hippies. In 1969, they incorporated the Tony and Susan Alamo Foundation, which was granted a tax-exempt status in 1973. As a result of their work, hundreds of youth turned to the church for salvation, and the church grew quickly. As it grew, Alamo also attracted the attention of CAN. CAN, acting as the "almighty" arbiter of religious correctness, made a fortune "cult-baiting" churches that they did not like, and CAN psychologists charged susceptible parents thousands of dollars to "deprogram" their children. CAN has since been forced into bankruptcy for these practices, after a jury fined them $4 million for religious persecution, and for illegally kidnapping and deprogramming a young man.

While there is nothing illegal, per se, with the government seeking CAN's help, what is illegal is for the government to adopt the perspective of an organization like CAN when that perspective is an attack on constitutionally protected religious practices and beliefs. Over the past several years, major religious scholars and leaders have attested to Pastor Alamo's deep religious convictions, whether or not they agree with these convictions. At the same time, CAN's "cult/brainwashing" construct has been debunked by the American Psychological Association, the Society for the Scientific Study of Religion, and the American Sociological Association. Further-more, the courts have repeatedly ruled that anti-cult and brainwashing testimony is inadmissible in court because it does not rely upon a generally or even substantially accepted scientific foundation.

The IRS, however, never consulted with religious scholars or leaders to determine the validity of Pastor Alamo's religious theories, or, for that matter, CAN's theories. They ignored a Supreme Court decision, which recognized the legitimacy of the church, and they ignored the protections provided to First Amendment activities, against government interference or persecution. The IRS completely disregarded the missionary activities of the church, and the fact that the church provided food, clothing, lodging, schooling, and jobs for its followers. The church's good works, such as taking young people off drugs, and giving them faith in God and a reason to live, were also completely ignored. The IRS spent close to 20 years devising (and imaginatively building) a criminal case against Pastor Alamo.

The IRS launched its investigation. They initiated two criminal investigations of Pastor Alamo, the first from 1973 to 1975, and the second from 1977 to 1980, both of which were dropped after no criminal liability was found. Yet this didn't stop the IRS — they initiated a third investigation.

In the middle of its criminal investigation, two former church members, Robert and Carey Miller, hooked up with CAN and its attorney Peter Georgiades, and sued the church for supposedly stealing their trucking business. In actuality, the Miller brothers had been forced to leave the church after it was discovered that they embezzled over $100,000 of church money. However, the judge in the trial was apparently taken in by a frenzy of "cult hysteria" and sensationalized hostile news accounts about Pastor Alamo, and took the case to trial without Pastor Alamo or any representatives from the church present. He issued a $1.4 million default judgement against Alamo, stating that church workshops and businesses, including the trucking business, were "alter egos" of Pastor Alamo. In other words, Alamo followers were brainwashed, and Pastor Alamo controlled all church-run activities.

After the trial, the government went a step further and indicted Alamo for threatening to kidnap the judge in the case, Morris S. Arnold. The government literally based their case on one newspaper account. Alamo had merely publicly criticized the judge's decision, but the media hype was bordering on hysteria. The case went to a jury trial, and Alamo was immediately acquitted.

The Millers were to become the government's key witnesses against Pastor Alamo. And, as we will see later, the IRS withheld from the defense its financial relationship with the Millers.

IRS Storms Church Property

With this as a backdrop, in June of 1990, the IRS issued a jeopardy assessment, claiming Pastor Alamo owed $745,000 in personal income tax for the years 1977-1980, and church-owned workshops owed $5 million in corporate income taxes, and $1.6 million in unpaid employees' withholding taxes. On June 11, the IRS seized church property in Nashville, Tennessee, including the famous "Alamo of Nashville" store along with its inventory, and church records. Alamo challenged the IRS in court and Judge Thomas Wiseman abated the seizure, and ordered the merchandise and records returned. However, instead of returning the property, the IRS turned everything over to the Miller's attorney, Peter Georgiades, toward the $1.4 million judgement.

Even though more than a million dollars worth of property and merchandise had already been seized, the IRS staged a second raid. On February 13, 1991, 60 U.S. Marshals with guns drawn, accompanied by Peter Georgiades and IRS officials, stormed the church's Alma and Georgia Ridge, Arkansas communities, where over 200 families lived. They confiscated their homes, businesses, personal possessions, and all church property, including two large office buildings containing all church records from the beginning of the ministry to the present. An estimated $50 million worth of property was taken. Several hundred families, including countless young children, were thrown out on the street, with only what they could carry. They lost all their personal belongings — their private homes, furniture, clothing, all their cash, food, toys, school materials, etc. One can only speculate that the government viewed these children as "worthless brainwashed zombies" who did not deserve a roof over their heads.

The church made seven legal attempts in five different courts to get back their records in order to properly defend Pastor Alamo. They failed. The government disingenuously claimed that the church abandoned the records. However, church members were not allowed back on church property to get the records. Armed guards were at the gates, telephone lines were cut, and offices were sealed.

Newly Discovered Documents Expose IRS Abuses

The Alamo Christian Churches recently received approximately 40,000 pages of IRS documents through the discovery process and through FOIA requests.

1. New IRS documents make plain that the IRS prosecuted Alamo
because they decided he was a "cult" leader and not a real religious leader.

The IRS' attitude toward Alamo was made clear at an IRS policy meeting of 6/7/90.
IRS Group Manager Ed Campbell counselled 16 fellow agents on how to deal with "cults" and on "the nature of Tony Alamo's organization's followers as to their cult, brainwashing nature." (Page 24003)

The IRS issued a "background" paper on the Tony and Susan Alamo Foundation which stated: "Through brainwashing, Tony and Susan Alamo required the associates to provide increasing amounts of free services to the Foundation..." (p. 53255)

IRS documents reference meetings between IRS agents and Cynthia Kisser, chair of CAN, Priscilla Coates, Director of Los Angeles Chapter of the Cult Awareness Network, and the Cult Committee of the Jewish Federation. (p. 51399, 51506, 52390-2, 52395-6, 52387-8-9, 51419-61, 58423-58425)

The IRS, however, obviously recognizing the First Amendment implications of their cult-baiting, agreed to have the term "cult" stricken from the court records. Nonetheless, the cult/brainwashing construct dominated the trial and was used by the probation officer to write Pastor Alamo's Pre-Sentence Investigation report (PSI). The probation officer inserted every unsubstantiated allegation made against Pastor Alamo by members of CAN. The PSI has plagued Alamo through the prison system. He has been defacto jailed for crimes he has never been accused of or tried for in a court of law. He has been denied parole because of allegations in the PSI, and prison authorities refused to move him to a prison camp because of the PSI.

2. Newly discovered documents prove that the prosecutor knowingly concealed exculpatory material that he had a duty to disclose.

Robert and Carey Miller, crucial government witnesses, submitted applications to the IRS for reward money. Applicants submitted Form 211 to supply information to the IRS in exchange for a portion of the taxes, penalties and fines recovered as a result. The prosecutor, Assistant US Attorney J. Christopher Belcher, failed to notify the defense. If the jury knew that the Millers were getting $21,000 each for assisting in Alamo's conviction, they may have listened to the brothers' testimonies differently, and would have gotten a more complete picture of why they were testifying. As it was, the jury had mixed feelings, and took three days before issuing a verdict.

During the trial, Prosecutor Belcher knowingly elicited perjurious material and misleading testimony from these government witnesses. Belcher asked Robert Miller and the two IRS agents responsible for the investigation, Larry Howlett and Charles Beauregard, whether they knew of any deals made with government witnesses. All three witnesses denied these accusations. This testimony was false. All the witnesses knew it was false, and the prosecutor knew it was false.

3. New documents expose that the government misled the jury by portraying Alamo as an obstructionist in its efforts to investigate him and the MSC for withholding the church's financial ledgers. New documents show that the IRS agents lied and were in possession of the ledgers long before the trial.

During the trial, Prosecutor Belcher asked Agent Howlett if he ever received any ledgers from MSC. Howlett answered, "No, sir." Newly discovered documents prove that the IRS had recovered these records from the church. Howlett knew this to be true, and Prosecutor Belcher actually had these ledgers in his custody before the trial. Yet, the government portrayed Alamo as attempting to derail its investigation by the IRS alleging they were unable to retrieve ledgers from the church. Judge McCalla chose to believe IRS agents and used Alamo's supposed failure to turn over these ledgers as the major reason for sentencing him to the maximum time allowed.

A notation in Howlett's IRS Case Chronology Record on February 22, 1991 reads: "There are more ledgers than expected. ...To safeguard all the ledgers and journals, we moved all ledgers and journals...and sent them to the IRS office and stored them in their property room." (p. 51380-2)

In a July 21, 1993 IRS memorandum written by Howlett to case file, he indicated he possessed MSC ledgers and that prosecutor Belcher knew about them, "I explained that there was one such box, and that was box 16 containing the general ledgers. I mentioned that I was through with ledger [sic] and as far as I was concerned they could take them, however, they were under the control of Chris Belcher."

In an October 3, 1990 letter to Alamo Attorney Neal Pendergraft, Howlett acknowledged that the ledgers had been received for some church activities. Alamo had no knowledge of such an agreement. Documents further show that arrangements to move the records were done with the assistance of US Marshal Rick Bean. (2/21/91)

4. New evidence reveals that the prosecutor failed to turn over IRS memoranda of previous investigations of Alamo and MSC, which were discontinued for lack of wrongdoing.

The IRS did not reveal information of prior IRS investigations of Pastor Alamo that should have been turned over in pre-trial discovery. Such evidence would have allowed the defense to explore why previous investigations did not produce formal charges of criminal or civil liability and would have supported the defense's allegations of government harassment.

The IRS also did not reveal a 9/23/82 memorandum by the Civil Rights Division of DOJ that a DOJ/FBI criminal investigation of Alamo for involuntary servitude was dropped after concluding there was no basis to pursue criminal charges.

5. New evidence exposes that the IRS hid pertinent interviews with Alamo accountants from the defense.

The IRS conducted two interviews with Alamo's accountant in 1981. IRS notes establish that the accountant knew of no wrongdoing. On 3/6/81, IRS Agents Erickson and Clarke interviewed two New York CPA's, Arthur Appleman and A.B. Wiener who had worked on Alamo's financial books. Appleman stated that during the course of the firm's work, nothing was brought to his attention indicating that Alamo was paying personal expenses from Foundation funds, and that "nothing was brought to his attention regarding improper handling of cash receipts." While not directly related to the years in question, it could have helped Alamo's attorney prepare more thoroughly for cross-examination of former church members and in terms of possible witnesses for the trial.

IRS documents show that on 10/01/90, Agent Dan Brautweiller contacted CPA Bill Bealle who had done work for the Tony and Susan Alamo Foundation (TSAF). Bealle stated that he did not feel Alamo was required to file with the IRS. The content of this interview was withheld from the defense.

The IRS quotes from an interview with former TSAF attorney Stanley Rader: "We considered [church] associates to be volunteers; and businesses were rehabilitation facilities and Form 990-T would not be required."

6. Agents Howlett and Beauregard testified that no deals were made with any witnesses. Besides Robert and Carey Miller, at least three other witnesses who agreed to cooperate with the IRS filed for reward money.

These witnesses included, Chris Coie, the estranged daughter of Susan Alamo. IRS documents reveal that the IRS worked with Chris Coie for 17 years.

Another witness was Elizabeth Caldwell (a former wife of Alamo). Howlett wrote of his efforts to retrieve her furniture, which had been taken along with hundreds of others when the IRS raided church property. (p. 23877)

IRS notes reveal that they gave immunity to Diana Williams at her grand jury testimony in Western District of Tennessee, March 10, 1993. (p. 51369-71) Williams testified against Pastor Alamo.

7. IRS documents expose that agents knew, but did not disclose, that information they received from former disgruntled church members was less than reliable.

Howlett wrote that the [church's] Tyne Blvd. house "did not look as good as witnesses had said that it would." Former church members claimed the Tyne Blvd. property was a mansion, and that Alamo lived a lavish lifestyle. (p. 23975)

Dave Kroopf, a former church member, stated in an affidavit to the IRS, that Alamo had guns on various church sites. IRS agents discovered this not to be true, nonetheless, relied on Kroopf for important information regarding church business.

The IRS relied on information from a private investigator hired by the Millers and Elizabeth Caldwell. The investigator claimed that Alamo had fled the country with large sums of money. The IRS never checked the information, and used this as an excuse to levy a jeopardy assess¬ment against Alamo. All the merchandise at the church's Nashville store was seized. While the judge ordered the assessment abated, and ruled that there was no basis for it, the merchandise was never returned. (p. 51401-2, 23872-23882)

The IRS relied on pertinent information from Chris Coie, Susan Alamo's estranged daughter whom she had disowned. Coie's accusations had to be suspect when she claimed that her mother did not have cancer and was using it as a ploy to solicit money from sympathetic people. Susan Alamo died of cancer in 1982. At one point, based on Coie's recommendation, a federal judge ordered a doctor to release Mrs. Alamo from a hospital the day before her death. The doctor refused.

8. IRS documents reveal that agents used "persuasive means" to get witnesses to talk.

Documents expose that the IRS met several times with Birgitta Gyllenhammer (a former Alamo wife) to convince her to reverse her decision not to talk with them. While there is no mention of how Gyllenhammer suddenly became a government witness, there is a handwritten note from Howlett reminding himself to check her 1040's. Gyllenhammer had substantial tax liens on her clothing business. (p. 51453-55, 51459, 61570-61572)

In another instance, Howlett wrote, "I explained to him [Larry LaRoche, a former church member who refused to cooperate with the IRS] that my purpose was to determine who benefited from monetary transactions in which he was involved and to determine the source of the funds." Howlett later wrote, "I explained that by having an explanation of the fund transfers we wouldn't have to prepare tax returns on him individually." The IRS did not reveal the content of their interview with LaRoche to the defense, which could have impeached testimony from CAN witnesses.

International Coalition for Religious Freedom
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