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WHAT'S UP WITH THE MOWERS?

September 08, 2006

We've received several requests for updates on the status of the tax case of Thomas and Dee Mower, the founders of Utah-based multi-level marketing company Neways. The couple was convicted last year on tax charges.

I'm surprised by the level of interest in the case. In addition to the comments, our old coverage of the Mowers continues to garner visitors. Apparently the Mowers have lots of concerned friends, bitter enemies, or both. Here's where their case stands.

Sentencing is scheduled for next Wednesday, September 13, at 2:30 pm in U.S. District Courtroom of Judge Dale Kimball in Utah. Sentencing memos have been filed by the defendants and the IRS, and it appears that the sentencing date won't again be deferred.

The key to tax sentences is the "tax loss" attributable to the tax evasion. In a report filed in April the judge determined the tax loss for Mr. Mower at $199,775; Mrs. Mower's tax loss was $89,112. For each defendant that constitutes a "base level 16" under the federal sentencing guidelines. The court apparently will use the 1997 sentencing table to determine the sentence. If there are no adjustments to the base level, that would indicate a 21-27 month sentence for the Mowers.

The judge has the authority to reduce the offense level for various reasons, including the defendants remorse, cooperation, and the like, and for other reasons. The judge can also increase the sentencing level for "use of sophisticated means" and other aggravating factors. Finally, the sentencing guidelines are just guidelines, which the judge can disregard if he finds compelling reason to do so.

I'm an accountant, not a lawyer, so I don't pretend to have any expertise in sentencing. That said, if I understand the table, some jail time seems likely - no less than 12 months, and probably not more than 36. The judge will let us know Wednesday afternoon.

UPDATE: NEWAYS FOUNDERS SENTENCED

Links:

Tax Loss Finding

Government Sentencing Memo

Defendant Sentencing Memo: Thomas Mower

Defendant Sentencing Memo: Dee Mower

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