Nearly nine months after Jo Hovind was found guilty on 45 counts of structuring, she was finally sentenced today. It was a real pleasure to greet this gracious, loving lady again today, although she was looking very haggard and worn out. The stress of not knowing what was going to happen, for the last couple years actually, must have really taken its toll.
Because of a regulation change in November 2002, Jo’s original charge of a level 22 violation was downgraded to a level 6. I don’t know the specifics of what that means, but in general, the offenses took place up through August 2002, so the regulations in force at that time were the ones that had to be used for sentencing. Downgrading from a level 22 to a level 6 meant a difference in sentencing guidelines from 41-51 months for a level 22 to 0-6 months for a level 6 offense. This was good news for Jo!
But the prosecuting attorney, Ms. Hildemeier, did not like this news and felt the penalty would not be that of one fitting the crime, so she argued for any amount over and above the sentencing guidelines, stating that they were only guidelines and were not mandatory parameters. Ms. Hildemeier stated that although Jo was not charged with any direct tax crimes, that she was conducting illegal activity related to evading paying employee taxes and therefore her cash withdrawals were for an illegal purpose. Ms. Hildemeier asked the court to consider Jo’s motive of aiding her husband to avoid IRS reporting requirements. She also stressed that while it is not illegal to pay employees in cash, it is illegal not to pay employee withholding taxes. In order to avoid a paper trail that they were not paying these taxes, Kent Hovind said they would use cash, since “cash wasn’t traceable.”
Jo’s defense attorney, Mr. Berenger, on the other hand, stated that when the criminal investigation began, it was only to investigate Kent for income tax evasion and did not include structuring. Jo didn’t know she was even being considered for investigation until April 2004. She did not withdraw sums of $9600 in cash after August 2002, so her attorney argued that she did not stop structuring based upon finding out that she was being criminally investigated, but for another reason, which was not noted. Berenger then stated that while Jo had indeed committed a crime, she had not done anything illegal, launching into a short speech about the IRS being more likely to look into cash paying customers rather than those who paid by check, if the IRS knows about them, and then stated that the Hovinds paid by check for years before they started using cash. Mr. Berenger insisted that Jo did not agree with Kent’s tax positions and that she didn’t do any of the calculations, but she was merely responsible for paying the bills. This was intended to be his defense for staying within the sentencing guidelines of 0-6 months and he requested probation for his client.
Ms. Hildemeier countered this by stating that Jo not only failed to withhold employee taxes, but that she also didn’t file personal income taxes, didn’t keep any records so that the IRS was prevented from calculating what was owed, that Jo herself signed the UCC tax protestor document, and that she revoked her own US citizenship. She believed that although Jo did agree with Kent regarding the tax issues, Jo did state that she thought Kent was hurting his own ministry by focusing so much on the tax issues.
There were several character witnesses after this. Three women who were longtime friends of Jo Hovind stood up and gave glowing testimony to her character as an exemplary Christian wife, mother, grandmother, and friend. She was noted for her compassion for those around her, for her hospitality, for her ministry roles in music and teaching, and they all spoke of how honorable, unselfish, and loving Jo was to everyone she met. Each friend pleaded for mercy.
Eric Hovind, her son, then reminded the judge that it had been his honor to speak on his father’s behalf at his trial, but that he considered this occasion to speak on behalf of his mother to be ten times that honor. “Justice has to be blind,” Eric stated, as he agreed with the judge sentencing his father to a sentence worse than that of a rapist. He said that this whole trial was really meant for Kent to be made an example of and that Jo didn’t need to be used in that same way. Eric expressed their family’s desire of being completely above board legally and said that as soon as they realized what they were doing was illegal that they began using an employee leasing agency instead. Although the structuring had taken place over a period of four years, Jo had been pleading with Kent for far longer not to be involved in these tax issues. Eric prayed for justice, which he deduced to mean probation.
A CSE employee, John, then stood up with his Bible and read Ephesians 5;22 – “Wives, submit to your own husbands, as to the Lord.” John explained that this verse was the foundation of a Christian woman’s mind, that this verse determined how Jo made decisions in life because she based her life on the Word of God and the Bible tells her to submit. She didn’t do what she did to break the law; she did it to obey the Lord by obeying her husband.
Then it was Jo’s turn to speak and she started off with a story about a man who left home running, he turned left, then turned left again, and finally ran back home where two masked men were still waiting there for him. She then held up a picture of a baseball diamond and retold her story. Perspective makes all the difference. False assumptions lead to false conclusions and Jo said this especially applied to her own motives.
There were three things Jo wished to convey to the judge. The first area related to who Jo is and what her motives were. She related some inaccuracies from the trial, apparently attempting to show that the truth was not always known. One of the facts she desired to set straight regarded the statement that Kent made to his employees when they switched from paying them in cash to using checks: “It’s become too dangerous to continue getting cash.” Jo explained that it had nothing to do with the IRS but that there were two occasions at the bank when the teller told Jo that she would need to be escorted to her car with all that cash because a certain man was watching her at the bank. She was so frightened, she told Kent she didn’t want to get the cash anymore, so they gradually changed to using checks instead.
In response to the accusation that she would sometimes make two cash transactions of $9600 daily, Jo stated that her father was sick and dying in Arkansas during a period of five years and that sometimes she would get a call to come quickly. She wanted to make sure there would be enough money in petty cash for the following week, so she would go and take out more money. Jo said that CSE needed $9000 in petty cash each week.
Jo also spoke to the accusation that she was evading the IRS reporting requirements: “I do not understand how I can be charged with doing something I didn’t know was wrong. I would never do anything illegal.”
Jo told a story about one time when she went to the bank and there was a new teller who asked her to fill out a form. Jo said that the fact that she did indeed fill out the form should have indicated that she was being honest. Structuring is a crime for illegal use, but she stated that she used the money honestly to pay the bills and salaries.
The second thing Jo wished to impress upon the judge was that this judicial process was designed to bring about change in an individual so that they won’t keep repeating their crimes, but that Jo had already learned her lesson and started using checks four years ago, before she realized what she was doing was illegal.
The third area Jo desired to convey was her willingness to fully cooperate with anything the judge wanted her to do. She had come to appreciate the judge’s role in this process and prayed for her nearly every night, that the judge would have wisdom and see the truth. “Whatever you order for me to do, it will first come across my Heavenly Father’s desk: approved.” Jo told the judge that one day we will all stand before the final Judge and she wanted Him to say, ‘Well done, thou good and faithful servant.”
Judge Rogers then said that since Jo did not take the stand during her own trial, she wanted to give her the opportunity to explain her motives for regularly taking out large sums of cash just under the $10,000 cash transaction reporting limit. Jo responded that CSE needed $9500 for weekly expenses and that she doesn’t ever want to be accused of hiding anything.
Ms. Hildemeier responded again by stating that $9600 was taken out on a very irregular basis. It would have been understandable if Jo took the money out every Friday, for instance, but she took the money out sometimes weekly, sometimes several times a week, and sometimes even twice a day, once before the 2 p.m. bank’s end of day and once after. She also noted that after the criminal investigation began, the amounts of cash withdrawn dropped down to about half the amount being withdrawn earlier, however the frequency also doubled, so there was no overall net change in cash withdrawals. As far as needing about $9500 for petty cash, Ms. Hildemeier noted that when the IRS conducted their raid, they found $42,000 in cash that day.
When we came back from a break, the judge was ready to sentence Jo, but had a few things to say first. Jo was not charged with tax evasion or for failing to withhold employee taxes or obstructing the IRS. Kent was charged with those. They were both charged with unlawful structuring, however. Structuring involves taking out large amounts of cash just under the $10,000 Currency Transaction Report requirements which take effect anytime cash is withdrawn in amounts greater than $10,000. Jo was found guilty of 45 counts of unlawful structuring. If the sentences for these 45 counts were to be served consecutively, Jo would be facing up to 220 years in jail, but consecutive terms are extremely rare in these cases, so although the local newspaper had reported such this morning, it would be a totally unrealistic characterization.
The judge related that she had received many letters on Jo’s behalf, and without exception, they all requested mercy. But justice encompasses what is just from a societal standpoint as well. While many writers noted Jo’s strong faith in God, Judge Rodgers said that this case was not about religion, but about violating the law. Although Jo’s character may favor probation, society needs to see her incarcerated. Twelve citizens of Pensacola found Jo guilty, even though she was well respected in the community. The judge felt that this sentence must reflect the seriousness of the offense in order to thwart others who might be tempted to do the same thing.
At level 22, Jo would have faced 41-51 months of incarceration, but since it was downgraded to a level 6 offense, the US Sentencing Commission felt that the downward adjustment should apply to Jo and she should benefit, and that the guidelines are merely guidelines, they are not binding or mandatory. The judge must consider the seriousness of the offense. However, due to ex post facto considerations, since the last structuring offense took place in August 2002 and the regulations for structuring changed on November 1, 2002, there were several other considerations that show that the guidelines for a level 6 offense were insufficient. Before the change, the rules for structuring were such that the bank was required to report all cash transactions of $10,000 or more. After the change, the bank was required to report a total of $100,000 in cash transactions, which would effectively catch those who were constantly taking out just under $10,000 in cash. The Hovinds took out over $1.5 million in structuring offenses.
The judge noted that Jo was in charge of the payroll, not that she just paid the bills. She did not take out $9500 weekly for expenses, her transactions were often more than once per week. On several occasions, there were two withdrawals per day, all of them occurring once before the 2 p.m. bank end of day deadline and one after. It was clear that the Hovinds did this to avoid reporting requirements. This conduct was done clearly to facilitate avoiding paying employee taxes and to “keep the ministry under the radar screen of the IRS.”
Trial evidence showed that [Kent and] Jo committed additional acts of structuring to buy a home earlier, although the statute of limitations has since run out on those acts. Although they used cashier’s checks for this conduct and it did not fall under the same type of structuring laws, the behavior was the same and it showed a pattern.
Jo herself claimed “Sovereign American” status, revoking her US citizenship and attempting to revoke all previous signatures. Kent has a tax protest video of which Jo was well aware. (I’m not sure of the significance of that.)
So, although the sentencing guidelines were for 0-6 months for this level 6 offense, Judge Rodgers found that the seriousness of this crime required a greater punishment after all and Jo was therefore sentenced to one year and one day of incarceration at a local facility, followed by three years probation. She was assessed a $3500 fine, payable at $100 per month starting three months after her release and a $4500 special monetary assessment, $100 per charge, payable immediately. All terms were concurrent. The judge did suspend mandatory drug testing for Jo and allowed her to remain on release until August 31st, unless she chose to report earlier voluntarily.