Accountant testifies in 'Survivor' winner's tax fraud trial

PROVIDENCE, R.I. --An accountant for "Survivor" winner Richard Hatch warned the reality TV star not to file a tax return omitting the $1 million prize he won from the hit CBS show, she testified Wednesday during Hatch's federal tax fraud trial.

Hatch is accused of failing to pay taxes on his prize and also using for himself donations made to a charity he created.

Accountant Jodi Rodrigues Wallis said she prepared a 2000 tax return for Hatch that showed he owed the Internal Revenue Service about $234,000. At Hatch's request, Wallis said, she prepared a second return calculating how much he would have owed had he not won the prize.

During opening statements, Hatch's lawyer, Michael Minns, said Hatch wanted the return prepared without the prize money for comparison purposes.

The accountant showed Hatch the second return on March 19, 2002, and made him sign a statement warning the analysis was "not meant to be filed," she said. According to prosecutors, Hatch left the accountant's Middletown office that same day and mailed the IRS the incorrect return. It showed Hatch was owed a $4,483 refund, which he later received.

Wallis said she was "stunned" when she later learned Hatch had filed her second analysis.

During a cross-examination by Hatch's lawyer, Wallis testified she told Hatch not to file the second tax return, warning she could lose her license. She received immunity from prosecutors in return for her testimony.

Wallis told jurors she also prepared Hatch's 2001 tax return, but said he never told her about $320,000 he received for co-hosting a morning radio show in Boston or the more than $10,000 he received for renting his Newport house to college students.

That year, Hatch received a $44,874 refund from the federal government, said IRS Special Agent Jason Rameaka.

Rameaka testified that Hatch used money donated to his charity, Horizon Bound, to pay Downes Construction more than $26,000 for work on his homes in Newport and Middletown.

Hatch also used the charity's bank account to write a series of checks made out to friends as Christmas gifts and to pay for cleaning bills.

The memo line of a $100 check meant for a friend read, "I love you. Thank you for your kindness." Hatch wrote one check payable to "cash" for $1,500 and another payable to himself for $908, Rameaka said.

Hatch drained all but $100 from the charity's bank account, according to the IRS agent.

On Tuesday, accountant Richard Plotkin told jurors that he prepared an income tax return for Hatch in 2000. He said he advised Hatch to pay income tax on his prize, and that Hatch never objected.

Hatch has said he thought CBS was responsible for paying the taxes on his winnings, though CBS has said Hatch was aware he had to pay.

Prosecutors said they plan to finish presenting evidence as early as Thursday. Hatch's lawyer said the reality TV star will testify in own defense later this week.