Joe Francis Pleads Not Guilty on Tax Evasion Charges

In a brief hearing at U.S. District Court in Los Angeles, Francis pleaded not guilty to charges that he had deducted more than $20 million in bogus business expenses on his corporate returns during 2002 and 2003, and a trial date was set for Sept. 16 in Los Angeles. Francis had been indicted in April 2007 in Reno before the case was transferred to Los Angeles to make it more convenient for witnesses.

"No matter how much the government pursues me because of what I do for a living, I will be vindicated again because ultimately the truth will come out," Francis said Monday in an interview outside the courtroom.

"This case results from his criminal conduct and not from any other motivation," said Thom Mrozek, a spokesman for the Justice Department.

The government claims that Francis used offshore companies and nominee signatories on bank and brokerage accounts to conceal much of his income during the two-year period.

Francis' attorney, Robert Bernhoft, said a former corporate accountant for Francis' Mantra Films Inc. of Santa Monica and Sands Media Inc. of Nevada prepared tax returns without showing them to Francis. After leaving the companies, Bernhoft said, the accountant contacted the IRS seeking millions of dollars in bonuses for reporting his own "accounting mistakes," under a government whistle-blower provision nicknamed "the rat-out-your-neighbor program."

Under the program, informants can collect 15-30 percent of the money eventually recovered from tax cheats by the government, including penalties and interest.

"This ain't 'Girls Gone Wild.' This is the IRS gone wild," Bernhoft said. "The American taxpayers should be outraged that an IRS program is being abused like this."

Bernhoft defended mainstream actor Wesley Snipes in Ocala, Fla., this year. Snipes was acquitted of tax fraud and conspiracy charges but convicted of three misdemeanor counts of failing to file tax returns.