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Update on Robert Kahre Case
by Jacob G. Hornberger

I have published three blog posts regarding the abusive grand-jury subpoena that federal prosecutors in the Robert Kahre case served on the Las Vegas Review Journal:

Kahre’s Prosecutors Are Going Nutso (June 12)

Federal Prosecutors Buckle on Abusive Subpoena in Kahre Case (June 17)

Suppressing Free Speech Here at Home (June 25)

Dozens of people had posted online comments under a news article that the Review-Journal had posted about the case, most of which were critical of the prosecution.

The subpoena initially demanded production of identifying information of all the commentators. Later, in an implicit acknowledgement that the subpoena was overbroad, federal prosecutors agreed to reduce its scope to two commentators. One commentator had suggested that if the jury returned a guilty verdict, the jurors should be hung. The other one bet fictional Star Wars money that one of the prosecutors wouldn’t reach his next birthday.

While the paper had resisted the original subpoena for being overbroad, the paper announced an intention to comply with the modified subpoena. According to the paper’s editor, Thomas Mitchell, “We want to be good citizens and do the proper thing.”

However, before the material was turned over, the ACLU intervened in the case by filing a motion to quash the subpoena. The ACLU specifically requested the paper to delay production of the information until the federal judge had ruled on the ACLU’s request.

The paper, however, apparently decided to reject the ACLU’s request and went ahead and turned over the information to the prosecutors. Of course, no doubt that’s what the prosecutors would argue is what being a “good citizen” is all about — ratting on government critics before allowing a federal judge to rule on whether it is necessary to do so.

Meanwhile, according to a press release issued by the ACLU of Nevada, the prosecutors began filing secret pleadings in the case, so secret in fact that not even the ACLU has been permitted to see them. That obviously makes it difficult for the ACLU to respond to whatever the prosecutors have told the judge in secret.

Such secrecy is extremely unusual, even bordering on the bizarre. After all, the Kahre case is one alleging tax evasion, and the subpoena issue involves matters relating to the First Amendment and privacy. It’s not like there are national-security issues involved here.

In fact, historically America has stood against secret judicial proceedings, which were the hallmark of judicial proceedings in the Soviet Union and Nazi Germany and still are the hallmark in communist China. The fact that federal prosecutors are being permitted to get away with such bizarre conduct in a federal proceeding in an American court is truly phenomenal.

To the ACLU’s credit, it still is litigating the matter, notwithstanding the government’s claim that the issue is now moot given that the paper has already delivered the information to the prosecutors. The ACLU is contending that the government should be prohibited from utilizing the information and should be ordered to destroy it.

Meanwhile, the trial in the Kahre case proceeds on, with the defense preparing to present its case, according to this article in the Review Journal.

Here are the two blog posts I’ve published on the Kahre case itself:

Prosecuting Robert Kahre for Embarrassing the Federal Reserve (June 3)

Federal Fraud in the Kahre Case (June 26)

Originally, the case was about Kahre’s use of gold coins and silver coins as legal tender in the payment of compensation to his workers, who reported the income to the IRS at the face value of the coins rather than the market value of the coins. In the original case, the government also threw in a criminal allegation that Kahre defrauded the IRS by treating the workers as independent contractors rather than as salaried employees.

That original case ended up with acquittals for some defendants and a hung jury for Kahre and other defendants.

According to the Review Journal, this time around the feds have thrown in an additional charge, alleging that Kahre conspired with his girlfriend to hide taxable assets “by buying shared homes in her name using falsified documents.” The government’s principal witness on this allegation is Thomas Browne, a local real estate agent whose marriage to the sister of Kahre’s girlfriend, ended in divorce. According to the Review Journal, Browne had once been Kahre’s best friend but that the “two men grew apart shortly after armed federal agents and local police” raided Kahre’s business in 2003.

No doubt Browne’s testimony against his former best friend and former sister in law is motivated by his desire to be a “good citizen” too. Never mind that the feds have promised to reduce his felony indictment to three misdemeanor counts if prosecutors conclude that his testimony has provided them with “substantial assistance” in the trial.

Jacob Hornberger is founder and president of The Future of Freedom Foundation, publisher of Your Money or Your Life: Why We Must Abolish the Income Tax by Sheldon Richman. Send him email.