Parkersburg attorney Richard A. Hayhurst, foreground, leaves the U.S. District courthouse in Charleston on April 14 following his sentencing on tax evasion charges. (Photo by Lawrence Smith)
CHARLESTON -- As many West Virginians scrambled to file their taxes by the April 15 deadline, one Wood County attorney learned the hard way what happens when those taxes aren't paid.
Richard A. Hayhurst on April 14 was sentenced to 21 months in federal prison for evading taxes. The charge stems from an investigation conducted by the Internal Revenue Service that Hayhurst failed to pay taxes totaling $405,000.
Following a charge of information filed in September by the U.S. Attorney's Office, Hayhurst formally plead guilty in November to one count of willful failure to collect and pay over taxes. The charge against Hayhurst included his failure to not only pay personal income taxes for three years, but also deduct taxes for his employees including $8,792.53 from the fourth quarter of 2003.
Prior to the imposition of his sentence, Hayhurst, 61, asked Judge Thomas E. Johnston for leniency not so much for himself, but for his family.
"Please, please, please don't over penalize my family," Hayhurst said in a low and deliberate voice.
Without going into detail, Hayhurst admitted he made "a cowardly choice" between paying what he owed to various government agencies, and maintaining his lifestyle in Parkersburg. Nevertheless, he said "I'm here to accept responsibility for what I did."
After thanking many of the people who came to Charleston to support him, including his "brothers at the Bar," Bob Martin, Steve Flesher, and Andrew Woofter, Hayhurst paid a special tribute to Ruth Loftis, the probation officer that conducted his pre-sentence investigation, for "saving my life." Loftis, Hayhurst said, referred him to David Clayman, a high-profile clinical psychologist in Charleston, who later diagnosed Hayhurst with clinical depression.
"None as been as effective as probing and understanding me as he has," Hayhurst said.
Though he admitted it was no excuse for his behavior, Hayhurst admitted to being diagnosed with clinical depression was early as 1993. Unspecified medication he took for it seemed to help him cope, Hayhurst said.
However, his depression got worse following the death of his mother in 2000. It was then, Hayhurst said, he was "put into a tailspin" and the files in his law practice "kept getting darker and darker."
After Hayhurst finished speaking, his attorney, Craig Kay, noted Hayhurst was working diligently in making restitution to the IRS for the back taxes he owes. In the 20 years he's known him, Kay said he's found Hayhurst to be "courteous, professional and ethical in all his dealings."
After Johnston announced he was sentencing Hayhurst to 21 months, a faint gasp could be heard from the gallery. Incarceration was necessary, Johnston said, due to Hayhurst's previous conviction for income tax related charges.
"It didn't seem to teach you a lesson," Johnston said.
The sentencing recommendation called for Hayhurst to receive a minimum of 27 months in prison. However, Johnston said he was deducting six months due to Hayhurst's service to the community that included helping with adoptions, and free legal clinics for the poor.
Records show Hayhurst in April 1996, Hayhurst pled guilty to one count of failing to file his 1991 income tax return. At the time, Hayhurst incurred a debt totaling $197,314 in failing to pay taxes to the city of Parkersburg, the state of West Virginia and the IRS from 1989 to 1992.
Hayhurst was sentenced to four months probation at a federal halfway house, and one-year supervised probation which included four months home confinement.
Following his conviction, the state Supreme Court ordered Hayhurst's license be suspended for three months. In the suspension order, the Court noted that he stipulated to being current on all his tax obligations.
The subject of disciplinary action by the state Bar following Hayhurt's conviction was something discussed prior to sentencing. Both Kay, and Martin, who acknowledged he would be aiding Hayhurst with any charges filed by the Office of Disciplinary Counsel, the Bar's investigative arm, that ODC has taken an interest in the case, but has yet to bring any formal charges.
Martin said that while disciplinary charges are not automatic if an attorney is convicted of a felony, the attorney is required by the Rules of Professional Conduct to report it within 30 days. The big question, Johnston said, is not so much if ODC will file charges, but what penalty the Supreme Court may impose.
"He's going to be far able to pay his taxes if he has a law license versus if he doesn't," Johnston said acknowledging the possibility Hayhurst may be disbarred.
Johnston asked both Kay, and Assistant U.S. Attorney Thomas C. Ryan what they believed would be an acceptable minimal monthly payment Hayhurst should make as restitution following his release from prison. Both agreed to $500 to $1,000.
Though he imposed no fine, Johnston ordered Hayhurst to pay $500 a month to the court as a special condition of his supervised release. Also as a condition of his release, Hayhurst was ordered to not open any new lines of credit, disclose all his financial information, turn over all unexpected earnings to the court, cooperate with the IRS and undergo a mental health treatment program.
When Johnston asked for a recommendation as to where Hayhurst should his sentence, Kay said the closest to Parkersburg which would be the Federal Correctional Institution in Morgantown. Johnston agreed to make that recommendation to the U.S. Bureau of Prisons, and said Hayhurst would be allowed to self-report wherever BOP placed him.
Following the hour-long hearing, both Kay and Hayhurst declined a comment.
U.S. District Court for the Southern District of West Virginia, case number 09-cr-217
