GRAND JURY INDICTS “SURVIVOR” WINNER RICHARD HATCH ON CHARGES OF TAX EVASION AND DEFRAUDING CHARITABLE CONTRIBUTORS

WASHINGTON, D.C. - A federal grand jury in Providence, Rhode Island, today indicted Richard Hatch, of Newport, on charges of tax evasion and fraudulently using charitable donations for personal expenses. In a 10-count indictment, the grand jury alleges that Hatch, winner of the first Survivor reality television series, failed to report about $1,037,000 income from Survivor and about $391,000 income from a half-dozen other sources.

Eileen J. O’Connor, Assistant Attorney General for the Tax Division; United States Attorney Robert Clark Corrente; and Rebecca A. Sparkman, Special Agent in Charge of the Internal Revenue Service (IRS), Criminal Investigation, jointly announced the indictment, which the grand jury returned today in the U.S. District Court. The indictment is the result of a grand jury investigation that began after an information was dismissed in March charging Hatch with two counts of tax evasion.

According to the indictment, Survivor Entertainment Group (SEG) paid Hatch $1,010,000 in August 2000 for appearing on the final episode of the initial “Survivor” series and for being declared the winner. In 2001, a Newport accounting firm prepared a 2000 tax return for Hatch that included Hatch’s Survivor income and concluded that he owed $441,501 in taxes. Hatch allegedly never filed that return.

According to the indictment, in December 2001 Hatch hired a Middletown accountant to prepare another 2000 return for him. That return, which also reflected the Survivor income, concluded that Hatch owed $234,807 in taxes. Hatch allegedly never filed that return, either.

In the autumn of 2002, according to the indictment, Hatch asked the Middletown accountant to prepare a 2000 return that did not reflect the Survivor income. The accountant did so but cautioned Hatch that the return, which called for a $4,483 refund, was for “informational” purposes only and was not to be filed. The indictment alleges that, contrary to the accountant’s warning, Hatch filed that “informational” return with the IRS.

According to the indictment, Hatch also failed to report other income for 2000 and 2001:

• $27,074, representing the value of a Pontiac Aztec given to him in 2001 as part of his Survivor prize;
• $326,540 that Entercom, Boston, LLC paid Hatch in 2001, through an S-corporation, for appearances on the Wilde Show, a radio program on WQSX-FM;
• $28,104 in rental income that Hatch received in 2000 and 2001 from property that he owned at 21 Annandale Road, Newport;
• $36,500 in charitable donations to Horizon Bound, a purported charity set up by Hatch, money that he allegedly used for his personal expenses.

According to the indictment, Hatch used a total of $36,500 in charitable donations for personal expenses rather than for charitable purposes. In 2000, Chambers Communications, of Eugene Oregon, donated $25,000 to Horizon Bound in exchange for Hatch’s appearance on a pilot for a television show called “For Goodness Sake.” The show, which never aired, was intended to promote “the good work that charities do.” Hatch allegedly added his name as a payee on the Chambers Communications check to Horizon Bound, deposited it in his personal bank account, and used the money for personal expenses.

In April 2001, according to the indictment, East Boston Savings Bank donated $1,000 and CAM Media donated $500 to Horizon Bound following a speech that Hatch gave at East Boston Saving’s annual meeting. Hatch allegedly used the money for personal expenses.

Hatch also allegedly used for personal expenses a $10,000 contribution that Weakest Link Productions made to Horizon Bound in 2001 in exchange for Hatch’s appearance on an episode of the quiz show, “The Weakest Link.”

The indictment charges Hatch with two counts of tax evasion, one count of filing a false S-Corporation income tax return, two counts of wire fraud, four counts of mail fraud, and one count of bank fraud. An indictment is merely an allegation and a defendant is presumed innocent unless and until proven guilty. The maximum penalty for each count of tax evasion, wire fraud, and mail fraud is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1,000,000 fine.

A summons will be issued for Hatch, 44 to appear for arraignment in the U.S. District Court in Providence.

The case was investigated by the IRS Criminal Investigation. Assistant U.S. Attorneys Andrew J. Reich and Lee H. Vilker are prosecuting it.

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