Former Columbia City Council member Brian De Quincey Newman avoided prison Tuesday and was sentenced to probation for failing to file income tax returns and failing to pay state taxes for two years.
The guilty plea from Newman, an attorney who once worked for the 5th Circuit solicitor’s office and whose father is a state judge, was only part of an unexpected day of criminal tax charges brought against Richland County leaders.
The state Department of Revenue also brought charges against current Richland County Council member Kelvin Washington. He was charged with failure to file state income taxes for three years and faces a maximum three years in prison and $30,000 in fines. He is free on bond.
The charges against Newman and Washington came out of an ongoing DOR investigation into the Richland County penny tax program, which was passed in 2012 when Washington was the County Council chairman.
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Lawyers for both men as well as the prosecutor in Newman’s case insisted Tuesday’s charges were personal and have nothing to do with the alleged public corruption investigation.
State Judge Cordell Maddox gave Newman two years’ probation but said it would be shortened to six months once Newman had paid $10,843 in back taxes for 2012 and 2013. That sum includes $1,000 in court costs.
Newman paid DOR $10,843 later Tuesday afternoon, so is now serving a six-month probation, his attorney Bakari Sellers said Tuesday evening.
Newman, 33, who was raised in Columbia and served on City Council from 2010-15, also will have to pay an as-yet-undetermined amount to the Department of Revenue in interest and penalties on his unpaid taxes.
Another of Newman’s lawyers, Pete Strom, told the judge that Newman had no excuse for not filing and paying taxes. “He is a lawyer; he is supposed to pay attention to detail,” Strom said. Newman could have been sentenced to up to two years in prison and $20,000 in fines.
Maddox appeared flummoxed by the spectacle of a lawyer whose father is a judge not paying his taxes. He asked Newman why he didn’t pay taxes.
“The truth is, your honor, I actually thought I had filed,” said Newman, whose father is state Judge Clifton Newman and who is the nephew of famed South Carolina civil rights leader and former state senator I. DeQuincey Newman.
Maddox said, “I know your father. I wish I wasn’t here.”
To reporters after the hearing, Strom and Sellers stressed that Newman’s case was not tax evasion, a charge that is a felony and a much more serious offense. Failure to file is a misdemeanor.
Sellers and Strom declined to say specifically whether Newman also had not filed taxes with the IRS for the years 2012 and 2013, but Sellers said that as of right now, “His (federal) taxes up to this point are squared away.” Strom, a former U.S. attorney, added, “We don’t anticipate any additional federal investigation at all.”
In 2012, Newman’s unreported income was $74,848; in 2013, his income was $130,331, according to warrants in the case.
Washington, 51, was charged with three counts of failing to file income tax returns for 2012, 2013 and 2014 for a total $426,000 in alleged unreported income. He is represented by attorneys Mike Duncan, Tim Rogers and Rep. James Smith, D-Richland.
At Tuesday morning’s bond hearings, county Magistrate Judge Michelle Branch-Howard set Washington’s bond at $15,000 and Newman’s at $10,000. However, Branch-Howard allowed Newman and Washington to go free on their promise to show up in court at future hearings. Neither man is a flight risk or poses a danger to the community, she ruled.
Just before the hearings, both men – who earlier had been fingerprinted and had their mug shots taken – sat in a caged area, chatting to each other. They appeared relaxed and often smiled as they talked.
As with Newman, the charges against Washington are misdemeanors.
Washington won’t have to give up his office. A public official convicted of a misdemeanor can’t be forced to leave office, said ethics expert John Crangle, executive director of Common Cause of South Carolina.
Washington, who holds a degree in electrical engineering, worked 25-plus years for the S.C. Department of Transportation in engineering and planning, according to his lawyer, Mike Duncan. Now retired from DOT, Washington is a self-employed consultant in public relations and transportation, Duncan said.
As for Newman, he has reported his case to the Office of Disciplinary Counsel, an arm of the Judicial Department that investigates complaints against lawyers, and that office is now considering Newman’s case, Strom said.
Attorneys are not supposed to commit actions that bring the legal profession into disrepute. Newman could receive various sanctions for his crime, likely a suspension of his law license.
“The state Supreme Court has considered dozens of these failures to file state income taxes cases, ones with criminal charges as well as ones without, and uniformly imposes a 90-day definite suspension of the attorney’s law license,” said Desa Ballard, a Columbia attorney whose practice focuses on attorney disciplinary matters.
During DOR’s investigation of penny tax details, evidence of public corruption and millions in wasteful or potentially illegal spending in Richland County’s handling of revenue generated by the penny sales tax has turned up, according to a letter sent by DOR officials last month to county officials.
The letter was made public by the Department of Revenue. The agency then referred potential criminal matters to the State Law Enforcement Division.
During Newman’s Tuesday hearing, prosecutor special assistant attorney general Allen Myrick told the judge that evidence concerning Newman’s failure to file 2012 and 2013 taxes surfaced while DOR was conducting a separate investigation into the penny sales tax. In a detailed audit such as the such as the one DOR has done of the penny sales tax program, it is routine for auditors to check the income tax records of top people involved.
Myrick labeled the current charges against Newman a personal matter separate from the ongoing DOR investigation.
Newman only filed his state income taxes for 2012 and 2013 after being notified late last year of DOR’s investigation of him for not filing.
As a councilman, Washington makes decisions about where the penny sales tax revenue goes. Newman’s law firm is slated to receive hundreds of thousands of dollars in legal fees from the penny sales tax.
Newman’s law firm is one of a small group of businesses chosen by county officials to plan and implement the projects paid for by the penny sales tax. Newman’s firm is to be paid $398,000 over a five-year period from the penny sales tax.
Following the hearing, Newman’s attorney Sellers told reporters that although evidence concerning charges Newman now faces may have grown out of DOR’s audit investigation, there is nothing linking Newman to any misappropriation or mishandling of money raised by the penny sales tax.
In a statement released by his lawyer, Newman said: “While some might be tempted to make an excuse at this point, I am not, there is no excuse and I take full responsibility for my actions.”
Duncan, Washington’s attorney, said, “The current charges relate only to Mr. Washington’s personal tax returns. There are no allegations about any mishandling of penny sales tax revenues.”
Duncan also said there were no immediate plans for a hearing in Washington’s case.
Washington could face up $10,000 and/or one year in prison on each of his three charges. However, given that he, like Newman, has no prior criminal record, he is unlikely to get a maximum sentence.
In a statement Tuesday, DOR director Rick Reames III said, “The public deserves accountability from its government and elected officials. The department will force this accountability by taking action against those who violate the law.”
Staff writer Sarah Ellis contributed to this report.
Charges against Brian Newman
Two counts of failing to file state income tax returns, and failure to pay state income taxes, in the years 2012 and 2013.
Each count carries a maximum one-year prison sentence and $10,000 fine. In all, Newman pleaded guilty Tuesday to failing to pay $9,843 in state taxes.
Charges against Kelvin Washington
Three counts of failure to file state income tax returns, and failure to pay state income taxes, in the years 2012, 2013 and 2014.
Each count carries a maximum one-year prison sentence and a $10,000 fine. In all, Washington is charged with failing to pay $7,246 in state taxes.