Referee's Tax-evasion Trial Begins In Federal Court Steve Javie Is Charged With Not Reporting Income From Air Tickets.

Posted: January 06, 1999

The trial of the only NBA referee to fight charges of tax evasion in the downgrading of airline tickets opened yesterday in federal court with a frequent-flyer defense.

Steve Javie, 43, of Blue Bell, is one of 10 NBA referees to be charged with tax offenses in the exchange of tickets for air travel to basketball games, but he is the only one to plead not guilty.

Government prosecutors said that Javie, who is accused of failing to pay federal income taxes on $82,000, provided false receipts to the NBA and deceived his own tax preparer in an effort to under-report income from 1991 to 1993.

Javie received payment for first-class tickets, prosecutors said, but downgraded to coach class and pocketed the difference.

The practice of exchanging first-class tickets for less-expensive tickets was permitted under the referees' collective-bargaining agreement with the NBA, but the league was required to report to the Internal Revenue Service whether any income was derived from the exchange. The NBA relied on information from the referees in reporting to the IRS.

The referees who have been sentenced have received a combination of probation, home confinement, community service and fines.

Yesterday, Javie's lawyer, Greg McGarity, argued that the referee's use of his own frequent-flyer miles helped make up the difference between the cost of the two categories of tickets and also indicated the referee hadn't intended to cheat on his taxes.

``We say that he flew first class every time he was entitled to,'' McGarity said, ``that he submitted accurate records to the NBA, and that the IRS refuses to credit him . . . [for the] frequent-flyer miles.''

``When he downgraded,'' McGarity added, ``on that same flight he would upgrade to first class [using frequent-flyer miles] . . . in his mind, it was a wash.''

Assistant U.S. Attorney Judson Aaron contended that Javie had deliberately dodged taxes.

``He submitted false receipts to avoid having the NBA report his actual income and to avoid paying taxes on that income,'' Aaron said. ``He also deceived his tax preparer by not telling him what he was doing in downgrading his tickets.''

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