Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, March 21, 1992 TAG: 9203210332
SECTION: VIRGINIA PAGE: A-3 EDITION: METRO
SOURCE: VICTORIA RATCLIFF STAFF WRITER
DATELINE: LENGTH: Medium
Because of the circumstances surrounding his crime and because of his obligation as a lawyer to uphold the law, Selbe should be forced to serve time in prison, Assistant U.S. Attorney Karen Peters said in a memorandum filed in U.S. District Court in Roanoke.
Despite his guilty plea last August, the 46-year-old former tax lawyer, Vinton town attorney and self-styled civic leader still "basically claims that he did nothing wrong," Peters wrote.
Selbe, who pleaded guilty to a felony charge of evading income taxes for 1983 by filing a false return and to two misdemeanor charges of failing to file tax returns for 1985 and 1986, is scheduled to be sentenced Wednesday.
He faces a maximum seven years in prison, a $450,000 fine, or both on all charges. Selbe voluntarily surrendered his license to practice law last fall with disciplinary charges pending.
His attorney, S.D. Roberts Moore, said Friday that Selbe is guilty only of those charges he pleaded guilty to and that he doesn't understand why the U.S. Attorney's office is "raising all those other questions. . . . If the government thought he was guilty of all these crimes, why wasn't he ever prosecuted for all those crimes?"
Selbe was indicted in 1990 on federal charges of evading federal income taxes for the 1983 and 1984 years. The basis of the government's charges against him was that he took money from American Chemical Co. Inc. while serving as its president, and did not report it on his income tax returns.
The government's investigation also revealed that Selbe had not paid taxes for the 1985-1990 calendar years.
Peters said Friday that she filed the somewhat unusual sentencing memorandum because the case against Selbe was complicated and she wanted the facts to be clear.
The memorandum outlined the case against Selbe, which began in 1987 when a whistleblower tipped off the IRS.
An audit revealed that Selbe - who resigned from his private practice in 1979 to become president of the company - had routinely diverted large amounts of money from American Chemical and then had the books falsified to cover up the diversions, the memorandum states.
The investigation showed that Selbe diverted at least $138,500 in 1983 and $96,000 in 1984 from American Chemical to pay for notes on Selbe's investments or for his personal living expenses.
After he became president of American Chemical, Selbe changed his lifestyle drastically, according to the memorandum. He moved from a modest, middle-class home in Southwest County to a mansion in South Roanoke. Selbe filled the house with antiques, buying rugs, antiques, portraits and collectibles sometimes by the truckload, according to the memorandum.
During that time, Selbe belonged to two country clubs, private eating clubs, drove a Mercedes and took shopping trips to New York. He used credit cards freely and paid those bills from company funds. He had regular maid and yard service performed by company employees on company time, according to the memorandum. He also used company employees to shop for antiques, pick up his cleaning and pay his personal bills.
He purchased half-interest in a $200,000 condominium at Wintergreen and helped support the recording efforts of the local Vikings rock band, the memo states.
Moore said Friday that Selbe's lifestyle was "probably a pretty normal lifestyle for a professional person with 10 years experience."
Selbe approached the government with an offer to plead guilty to the 1983 charge and to the two misdemeanor counts in exchange for the dismissal of the 1984 charge and an agreement not to prosecute him for failure to file tax returns for 1987-1990.
Selbe was never charged with embezzlement because the statute of limitations had expired.
The memo also says that Selbe filed a false financial statement in 1982 when he applied for a loan to purchase Lakeside Amusement Park and committed perjury in his divorce proceedings "concerning his relations with other women, apparently to protect his bargaining position concerning the marital property."
Despite his guilty plea, the memorandum states, Selbe still claims "that everything that he invested in and everything he made payments on was somehow for the benefit of the other stockholders, and that it is the other stockholders who are responsible for his conduct."
But Moore said that Selbe's guilty plea was "a clear acknowledgement that he was wrong." Selbe is not going to admit to any other charges because he is not guilty of those charges, Moore said.
Selbe currently is assisting his current wife in her catering business and "attempting to get things back on track in his own life," Moore said.
by CNB