Nine years ago, David Struckman was working the phones when the walls began to shake. It was February 28, 2001, the same day that movement in the Juan de Fuca plate sent a 6.8-magnitude shockwave across Puget Sound.
Jeff Drew
David Struckman was busted for running one of the biggest tax-avoidance enterprises in recent U.S. history. But he's not through with the IRS just yet.
Institute for Global Prosperity seminar video
Selling the dream: Struckman gives his pitch.
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Inside his home on a nine-acre spread in Issaquah, paid for with earnings hidden from the Internal Revenue Service, Struckman, wavy-haired and perpetually tan, dialed into a morning teleconference with the 15 members of his company's executive council. Scheduled for later was a second conference call with the small army of independent sales agents who hawked the tax-avoidance audiotape packages that had made him and his business partners rich. All in all, the day was unfolding routinely.
And then the house shuddered. Not because of a shift in the tectonic plates—the quake wouldn't hit for another few hours. Standing on the front porch was a federal agent with a battering ram. On the other end of the phone, the council listened as agents from the IRS Criminal Investigation division busted through the front door.
About that moment, an estimated 300 IRS investigators across the country went raiding. It was one of the largest coordinated tax-evader crackdowns in the agency's history. At the heart of it was Global Prosperity International, a benevolent-sounding company that federal officials would later describe as a pyramid scheme evolved for the digital age. Struckman prefers the term multilevel marketing group. But instead of women's makeup or knives, Global "sold people truth," he says. Less abstractly, Global sold, through a series of expensive audiotapes and offshore investment retreats, the notion that the Constitution doesn't empower the federal government to collect income tax.
Following the raids, Global's founders—Struckman; Daniel Andersen, the company's 33-year-old chief financial officer from Boston; and Lorenzo "Zo" LaMantia, the jovial multilevel-marketing veteran who planned Global's offshore investment seminars from his home in Oxnard, Calif.—were all detained while federal investigators searched their homes. All told, the IRS confiscated thousands of company records, hours of videotape, and documents containing the names of the Global "qualified retailers" who had bought into the Global system. Then the investigators left, evidence in tow.
Grand-jury proceedings followed, but the government's case didn't progress fast enough to snatch Struckman before he left the country. A criminal indictment was handed down in May, after he'd fled to Panama. In his wake, both LaMantia and Andersen made deals with the U.S. Department of Justice to testify against him.
Two years later, Panamanian police showed up on his doorstep in the mountainous township of David. He was taken into custody, driven by car to Panama City, and eventually returned to the U.S. According to court documents, Panamanian authorities classified it as a deportation. Struckman now says it felt more like a kidnapping.
At his 2007 trial, federal prosecutors said Global had cost the U.S. government untold millions in tax revenue and catered to a potentially dangerous subculture known as the "sovereignty movement," a group that counts among its onetime members Oklahoma City bomber Terry Nichols.
But in a phone interview from prison earlier this month, Struckman insisted to Seattle Weekly that he's never been an advocate for the violent overthrow of the government; he just believes in the gospel of personal sovereignty. "I believe that the right to freedom was given to us by God," he says. "Free enterprise is freedom, and free enterprise means that if you make the money, you can pay taxes if you choose to do so."
It's a position that has landed many an antitax promoter in prison. In 2004, a Seattle federal court judge sentenced Keith Anderson, the sovereignty-movement guru whose ideas about the illegitimacy of the U.S. tax system formed the backbone of Global's chief product, to 20 years in prison. Struckman himself was convicted of conspiracy to defraud the United States.
At his sentencing hearing, he told the court "I'm done fighting the IRS." Speaking from the low-security Terminal Island federal correctional institution near Los Angeles, Struckman says he's sticking to that promise—except he's actually not.
As Struckman tells it, the IRS investigators who conducted the investigation used illegal means to gather evidence that they later attributed to a source whose real identity is still in dispute. So he's appealed his conviction, even though he's just about done serving his time.
In August, Struckman will walk out of prison after nearly five years in federal custody. But he'll be on a short leash. The special conditions of his release seem designed to prevent him from backsliding into his old multilevel-marketing ways. To pay the $2,938,267 in restitution he owes, Struckman will have to find a job that issues him actual pay stubs, not cash. He's barred from working for himself. Nor can he accept employment from anyone he knew prior to his incarceration without approval from his probation officer. And upon request, he'll have to disclose all his financial records to the IRS.
But a win on appeal may result in the overturn of his conviction, with the added benefit of vacating his probation agreement. It might also give him room to sue the government for civil-rights violations. Perhaps more important, it would free him from the thing he's railed against for nearly 30 years: government control.
