Closing Arguments Expected Tuesday in Hatch Case

PROVIDENCE, R.I. – "Survivor" Richard Hatch decided not to pay taxes on the $1 million he won on the TV show's first season after discussions with producers, fellow contestants and his accountant, and, he testified Monday in his federal tax-evasion trial, after receiving two letters from the IRS.

Hatch is accused of failing to pay taxes on the money he won on the show in 2000, as well as other income, and is charged with using money on himself that had been earmarked for a charity. Testimony wrapped up Monday afternoon, and closing arguments were scheduled for Tuesday.

Hatch's lawyer on Friday alleged Hatch cut a deal with producers during the taping of the show: They would pay the taxes on Hatch's prize after he caught other contestants eating unauthorized food. But the reality TV star never testified about the allegations in front of the jury. Spokesmen for CBS and executive producer Mark Burnett said Friday they had no comment.

Hatch told jurors Monday he missed the deadline for filing his 2000 tax return, and later received two letters from the Internal Revenue Service warning that the government had not received it. The letters listed several sources of income he received, but did not mention his grand prize from "Survivor."

Hatch said he thought that meant someone else had paid the taxes on the prize.

But under questioning from Assistant U.S. Attorney Lee Vilker, Hatch acknowledged that the IRS letters cautioned the list of income may not be comprehensive.

Hatch said he called producers several times to ask about tax issues but they did not return his calls.

Burnett testified earlier in the trial that the contract Hatch signed stated contestants were responsible for paying all taxes.

Also Monday, Hatch acknowledged using money donated to his charity, Horizon Bound, to write a stream of checks covering personal expenses, including tips for his limousine driver, payments for workmen doing construction on his house and a $1,600 piano repair.

Hatch defended the expenses, saying he had already spent "far, far more than that" on the charity.

Some of the personal expenses were paid with a $25,000 donation meant for Horizon Bound, Hatch said. Prosecutors accuse him of typing his name onto the check so it could be deposited into his personal bank account.

But the reality TV star testified that officials at People's Credit Union altered the check, not him. Hatch said he wanted the funds deposited into his personal account because Horizon Bound didn't have one at the time. A former bank teller testified to a different version of events.

Hatch said improvements he made to his property were for the benefit of Horizon Bound, which was set up to run wilderness trips for troubled youths.

For example, he said he lengthened and widened his driveway to accommodate a bus in anticipation of launching camping trips from his home. Also, he said he leveled a portion of land so tents could be set up there, and said he added two extra bedrooms and a bathroom to the house to be used by the charity.

Hatch acknowledged that Horizon Bound never ran any trips, and said he sold the house in 2002 for more than $862,000. He said he took a loss on the sale.