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    IRS after popular business owner

    As residents rally behind the Pensacola man, the judge moves the tax fraud trial to Tallahassee.

    By THOMAS C. TOBIN

    © St. Petersburg Times, published May 27, 2001


    PENSACOLA -- With millions in the bank, the 70-year-old Italian with the Southern drawl could be sipping a cocktail and ordering steak at one of the fancy new restaurants in the downtown historic district.

    Instead, the cuffs on Frank M. Patti's well-worn khakis are tucked into a pair of rubber boots as he waves a roaring pressure washer. It is 8 p.m., and he's sloshing across the tiled floors of Joe Patti Seafood Inc., cleaning so it won't smell like fish in the morning.

    The bustling waterfront store founded in 1933 by his Sicilian-born father is a Pensacola institution with more than $14-million in annual sales. Ever the micro-manager, Patti trusts no one to hose down the store as he would, or buy all the seafood the next day.

    Also the owner of a nearby shipyard, he is an equally meticulous builder of boats. The Army Corp of Engineers was so pleased with its three new "Pattibuilt" vessels that it recently sent Patti a framed certificate for his "patriotic civilian service."

    If only another branch of the U.S. government -- the Internal Revenue Service -- saw it the same way, Frank Patti would not be in so much trouble.

    Charged with 12 counts of tax fraud, he faced a monthlong trial scheduled to begin Tuesday in Tallahassee. Or so it seemed until 2:30 p.m. Friday.

    That's when Patti drove his Ford pickup into an old locomotive that sits as a landmark in a city median. Police said he wasn't injured but may have crashed because of a medical problem. On Saturday he was listed in serious condition at Baptist Hospital in Pensacola. The accident was only the latest in a succession of unusual twists that have increased Patti's standing as a local legend and character. It has also placed the start of his trial in doubt.

    "There's nothing I can do," he had said last week before the accident, declining so close to his trial to speak in any detail about the case. "I feel just like a 2-year-old boy trying to whip a 15-year-old boy. It's impossible. And that's how I feel about the system."

    Staying mum is quite a change for Patti, who, unlike most defendants charged in federal court, has spoken out in his own defense.

    To the great dismay of U.S. Attorney P. Michael Patterson and U.S. District Judge Lacey A. Collier -- and even his own lawyers -- Patti has publicly accused the IRS and federal prosecutors of using "Gestapo tactics."

    He has asked Collier to remove himself from the case, saying the judge has ties to Patterson.

    He has said the government is trying to retaliate against him, primarily because the National Marine Fisheries Service once tried and failed to prosecute him on suspicion he accepted illegal snapper.

    Patti has done it all very publicly, speaking freely with reporters, lashing out on his company's Web site and proclaiming his innocence on his own cable TV talk show.

    He also has blamed his tax problems on a former accountant, whom he is suing.

    For their part, Patterson and his staff have suggested Patti was responsible for an attempted arson at the accountant's office.

    The prosecutors also have accused Patti's attorneys of unethical behavior for perusing internal IRS documents that were stolen from the agency and sent anonymously to Patti.

    But no development has spilled outside the courthouse with more impact than Patti's announcement last year that his businesses might have to fold while he is preparing a defense. If convicted, he faces up to five years in federal prison.

    With those words, the case was suddenly about more than just Patti.

    His three enterprises -- the shipyard, the seafood store and a fishing boat business -- employ about 200 people with a combined payroll of more than $4-million.

    The store, with more than 70,000 visitors a month, according to Patti, is a popular destination for tourists and locals alike.

    Many Pensacolans consider it part of the city's cultural life, with its lobster-shaped neon sign, its big, ice-filled tables and its army of aproned employees scurrying to and fro. Then there's Patti in the back office, wheeling and dealing for 15 varieties of fish from all over the world, plus shrimp, oysters, clams, crawfish, turtle, gator, octopus, squid and, of course, live Maine lobster.

    In response to Patti's statements, people called and offered to work for free. A customer printed 1,000 "We Support Frank Patti" bumper stickers, and Patti later printed thousands more. Supporters wear red, white, and blue campaign buttons.

    Roger Damio, a slight acquaintance of Patti's, started a letter-writing campaign to media outlets. Hundreds responded from all over Florida, Georgia and Alabama. A group of nuns wrote from St. Louis.

    "I can see him making a mistake, but not an intentional one," Damio said, reasoning that Patti's decidedly unglamorous lifestyle is not the mark of a cash-rich tax cheat. "I just think he's good people."

    Buoyed by the public outpouring, Patti let it be known he would keep his businesses going through the trial. But their long-term future was uncertain.

    "If I'm convicted," he told a television reporter recently, "all the Patti enterprises is history."

    Prosecutors struck back, saying Patti's efforts had poisoned the potential jury pool. The judge agreed, saying Patti had turned the trial into "a referendum" on the future of Patti's businesses. He said a Pensacola jury might fear a Patti conviction would earn them "the scorn of the community." So he moved the trial to Tallahassee, three hours east on Interstate 10.

    Patti has objected, saying he was only exercising his First Amendment rights. More important, he said, he cannot run his businesses from Tallahassee.

    Collier is standing firm.

    The government alleges that from 1993 to 1998, Patti failed to report nearly $7-million in business and personal income, in part by funneling shipyard receipts into the seafood store and his personal accounts without reporting it.

    Patti doesn't see how moving his money around internally should concern the government. "I paid taxes on top of taxes," he told the Pensacola News Journal recently. "I can't for the life of me figure out how this is something wrong. I just don't believe it."

    The Pensacola native has never been to the state capital and rarely ventures outside the 1-mile radius that includes his businesses, his home, his favorite breakfast spot and the perfectly preserved brick home of his mother, Anna, where each day he lights a votive candle in her memory.

    "I could tell you every tree, every dead grass spot, every tile in this building," Patti said from his favorite place on earth: the seafood store's back office. "I guess I'm a creature of habit. I like it that way."

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