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Hooters founder's knowledge key at tax trial

By KEVIN GRAHAM
Published November 9, 2005

TAMPA - Dollars and cents may have brought Hooters founder Lynn "L.D." Stewart to court on charges of tax evasion and filing false tax returns, but it is his common sense that could influence whether he is convicted.

John Fitzgibbons, Stewart's attorney, asked a federal judge Tuesday to acquit Stewart on all charges. Fitzgibbons argued that the critical element in the trial is whether Stewart had any knowledge and willfully participated in tax fraud. He said that Stewart's accountant, Michael Maricle, handled all Stewart's finances and that Stewart knew of nothing illegal.

U.S. District Judge Susan Bucklew agreed with Fitzgibbons - on his assessment that the trial hinges on Stewart's knowledge of illegal activity, at least. Still, she said, the jury should decide.

"There's a lot of evidence that Mr. Stewart is an educated man with a lot of common sense," Bucklew said. "He's made a lot of money, and he's good with numbers."

The judge said jurors will have to decide whether Stewart "was entitled to rely" on Maricle as his accountant.

The Internal Revenue Service says Stewart owes about $4-million more in income taxes than he paid in 1997 and 1998. The government has accused Stewart of failing to report $11-million in income during those two years, which he earned through selling his stock and ownership in Hooters Inc.

Federal prosecutor Jay Hoffer said Stewart and Maricle conspired to come up with an income figure so Stewart would pay lower taxes.

Maricle pleaded guilty in 2003 to two counts of helping prepare and file false tax returns and was sentenced to 30 months in prison in 2004. He has not yet served any of his sentence.

Closing arguments in Stewart's trial could begin as early as Thursday. But first, Stewart may take the stand to testify.

[Last modified November 9, 2005, 00:38:07]