Man is mum on refusal to pay taxes, his missing millions in gold

Chester Davis is nothing if not persistent.

For the better part of a decade, the Clackamas County resident fought a battle with the United States government, maintaining that it had no authority over him, especially when it came to its requirement that he pay taxes.

And when that led to his indictment last year on 10 counts of tax evasion and related charges, he continued to fight the government's authority - even refusing to allow his court-appointed defense lawyer to mount a defense, saying it would put him "under contract" to the government.

Davis was so serious about his aversion to its authority, the government charged "he tried scheme after scheme to hide his money - secret warehouse bank accounts, nominee corporation bank accounts, purchasing millions of dollars of gold - while simultaneously waging a decade-long battle with the IRS and its employees who sought to assess or collect his taxes."

And apparently his battle plans with the government involved more than hiding money and evading taxes.

When federal authorities searched his home after his arrest, they also seized 39 guns, body armor, and tactical gear, sniper training materials, survival manuals, and anti-government literature.

Davis "was preparing for some sort of battle with the government," prosecutors said.

They also found documents the government says suggested Davis was planning to flee to Panama and set up shop there.

There was also gold as well as about $1 million cash vacuum-sealed and hidden in bazooka tubes.

It wasn't always that way.

For the better part of two decades, Davis ran a firm - Electrical Systems Analysis - based in Gladstone, Ore., that sold software to power companies including General Electric, the U.S. Army Corps of Engineers and Bonneville Power Administration.

He made a lot of money from government contracts and paid a lot of money in taxes; corporate taxes, personal taxes.

It's not clear what happened that led to Davis's views to evolve since he refused to allow his lawyer to question witnesses or present opening or closing arguments at trial. At one point she tried to get a mental competency hearing for Davis. The judge refused, saying while Davis's views were unconventional there was nothing that warranted a hearing.

While one clue might come from the one statement he did make to the court - "My law form is the Holy Bible, the living word of God, through the common law. ..."

The government said it had more to do with greed and just not wanting to pay.

He stopped paying personal taxes and corporate taxes and when the government tried to conduct audits, he refused to cooperate.

According to prosecutors, Davis "took extraordinary measures to prevent the IRS from collecting and assessing his taxes. He deluged the IRS with frivolous and harassing letters, fake financial instruments, and fraudulent IRS forms. He crossed the line to attack people who were just doing their jobs, seeking to have IRS employees arrested and filing forms with the IRS seeking to have a tax imposed upon those who dared to audit him."

Davis fought the IRS every step of the way, not only harassing employees but going to Tax Court so often that a tax judge eventually issued a ruling saying his "arguments in this case are frivolous and without substance. He has taken numerous unrelated legal concepts, most of which have been rejected by the courts, and posed them as reasons why he is not compelled to report or pay Federal income tax. He has wasted the time and tied up the resources of the Government with matters that are without substance or merit."

He also, according to the government, used his money, his company's money and money he got from other tax protesters and bought gold.

Lots of it.

While the government found approximately $1 million in gold coins and bars, it believes as much as $7 million in gold might still be unaccounted for.

"Disagreeing with the tax laws is not a defense," Assistant United States Attorney Stacie Beckerman told the jury during the trial with three of the gold bars laid out in front of her.

The jury agreed, convicting Davis on all 10 counts.

On Monday, federal Judge Michael Simon sentenced Davis to 97 months in prison, pointing to the fact that while Davis made a lot of money from government contracts, he shirked his responsibilities as a citizen.

While everyone has to pay their share of taxes, "in a very real sense, that obligation is even greater when the bulk of your profitability and resources come from other taxpayers," said the judge.