A federal judge has barred Hatch's accountant from testifying about Hatch's bookkeeping skills or other tax problems that occurred after his sudden wealth — a key defense argument, his lawyer, John MacDonald, said in court.
The government needs to prove that Hatch intentionally cheated the IRS, which could be easier to do if Hatch's accountant can't testify about the way his tax returns were filled out, his lawyer argued.
Hatch is fighting charges he failed to pay taxes on the $1 million prize he won on the CBS reality show and other income. But the judge in the trial — set to begin next week in Providence, R.I. —has consistently ruled in favor of prosecutors who were embarrassed when Hatch turned down a plea deal late last year after initially accepting it.
All they have to prove now, prosecutors say, is that Hatch knowingly lied on his returns.
"What may or may not be his accounting or bookkeeping abilities is really irrelevant to that question," assistant U.S. Attorney Lee Vilker said in court this week.
Daniel Urso, a CPA representing Hatch, had been expected to testify for the defense that the reality show winner was not good at keeping track of his expenses.
U.S. District Judge Ernest Torres ruled, however, that Urso can testify only that Hatch's 2000 and 2001 tax returns were incorrectly prepared and that he had been trying to fix his tax problems by filing amended returns.
Urso was not Hatch's accountant at the time, but has since reviewed his returns from those years and tried to help Hatch prepare corrected returns. He claims to have been frustrated in his attempts, though, by a lack of cooperation from Hatch's prior accountant, according to Hatch's lawyers.
Torres has denied at least three other motions by Hatch's lawyers since last fall, including a motion to postpone the trial and another to have the government specify how much in taxes he owes.
Legal experts seem surprised at the speed with which the government has been able to prosecute the case. Hatch was indicted only last September and his trial starts in January — less than four months later.
Along with not paying taxes on his "Survivor" prize, Hatch is accused of not paying taxes on $327,000 he was paid to co-host a radio show and $28,000 in rent on a property he owns in Newport, R.I.
He is also accused of misusing $36,500 in donations to a charity he founded.
Hatch has strongly denied the charges and pleaded not guilty to charges of tax evasion, filing a false tax return, wire fraud, bank fraud and mail fraud.