SANTA FE, N.M. (AP) — A southern New Mexico farmer and businessman could face more time in prison because a federal appeals court on Monday tossed out his five-year sentence for failing to pay more than $25 million in federal taxes and fraudulently collecting farm subsidies.
Bill Melot of Hobbs was sentenced in 2011 and ordered to pay $18 million in restitution.
The 10th U.S. Circuit Court of Appeals in Denver upheld Melot’s convictions for tax evasion, failure to file tax returns and making false statements to the U.S. Department of Agriculture.
However, the court said a federal district court judge erred in calculating Melot’s sentence by concluding that he had accepted responsibility for his crimes. Judges have the discretion of imposing a less severe sentence when they make that determination.
Under federal sentencing guidelines, the court said, Melot had potentially faced more than 20 years in prison.
The case was sent back to the district court for a judge to impose a new sentence on Melot.
Melot’s lawyer, Gregory Acton, did not immediately return a telephone call or email seeking comment.
The court said Melot had continued to deny he owed federal taxes or willfully failed to submit tax returns. The court also said he “has tenaciously opposed the government’s efforts to collect the restitution he was ordered to pay by the district court.”
According to court records, Melot stopped filing federal income tax returns after 1986. Melot operated several gasoline stations as well as a farm. The court said Melot made “a frivolous tax argument” from tax protester literature that he wasn’t a U.S. citizen because he didn’t live in Washington, D.C. or a U.S. territory.
Melot used a false Social Security number to open multiple bank accounts, transferred assets to trusts and deposited money into a Swiss bank account in the Bahamas, according to the court.
Melot owed $18.5 million in federal income taxes, $6.6 million in federal fuel taxes and $7.7 million in Texas state fuel taxes, according to court records.