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Charges may be dropped against Hooters founder

Local prosecutors still need approval to drop the tax evasion charges against L.D. Stewart.

By JENNIFER LIBERTO
Published December 14, 2005

TAMPA - Hooters founder L.D. Stewart is a step closer to getting cleared of criminal tax evasion charges.

Assistant U.S. Attorney Jay Hoffer said in court Wednesday that local federal prosecutors decided to recommend that charges be dropped following a mistrial last month. However, they need to get approval from the tax division of the U.S. Department of Justice before they can dismiss the charges.

Attorneys said they expect a final decision within a month.

Stewart's last trial ended with jurors unable to come to a decision. Several jurors said after the trial that the biggest problem with the case was the government's key witness, Stewart's accountant, who lacked credibility.

During the trial, the accountant admitted to stealing nearly a million dollars from Stewart and hadn't revealed the theft in its entirely to prosecutors.

Stewart faces two charges of filing false tax returns and two charges of tax evasion.

The IRS says Stewart owes about $4-million more than he paid in 1997 and 1998. He's accused of failing to report $11-million in income over those two years, which was earned through selling his stock and ownership in Hooters Inc.

Stewart said he didn't know that his accountant had done anything illegal in hiding the money in offshore trusts.

Stewart said Wednesday he was pleased with prosecutors' decision to recommend the case be closed.

If the charges are not dropped, Stewart will go through another trial.

His attorney John Fitzgibbons said that the decision to clear Stewart remains in Washington, but that U.S. attorney recommendations are given "considerable weight."

[Last modified December 14, 2005, 18:58:02]