United States v. David R. Hinkson
Case History and General Overview
1. David R. Hinkson, a man who was never charged criminally with even a parking
ticket, has been made the subject of two recent Federal criminal indictments in
the State of Idaho. He has been detained by the United States Government in the
Ada County Jail in Boise Idaho, for the last eighteen months without a bond
hearing.
2. Hinkson, a 48 year old white male, is an outspoken inventor/scientist who owns a sole proprietorship business known as WaterOz which produces dietary supplements, primarily in the form of ionized mineral waters . His business has been relatively successful and has an international network marketing distribution network. Gross yearly income of the company has reached as much as $3 million in 2002 and is just over $1 million currently.
3. Hinkson has a history of philanthropy connected with his business and has given his products to those in need such as veterans and the elderly who are unable to afford same, has worked in children’s tuberculosis clinics and has provided free product to the BOTHA Aids Clinics in South Africa. At the time he was initially arrested on November 21, 2002, fifteen doctors specializing in treatment of infectious diseases were awaiting his arrival in the Ukraine and his lectures concerning the use of WaterOz products in the treatment of tuberculosis and other diseases.
4. At the same time he was developing his ionized mineral process, Hinkson was active in the ‘Truth in Taxation’ movement through appearances on his own talk radio show and others in the mid and late 1990s.
5. Since the late 1990s, Hinkson has strongly advocated his own position with the IRS that he was not a ‘person required to file’ individual income tax returns nor was he responsible for withholding employment taxes from his WaterOz employees and repeatedly requested a hearing on his position. Immediately after he requested a Seventh Amendment Common Law civil trial concerning his position in March, 2000 criminal proceedings were brought against him.
Grand Jury Hearings 2001 2002
6. Former Idaho Department of Labor Case Supervisor Shawn McDonald testified under oath that IRS Agents Morgan and Hines had vowed to "raid" Hinkson’s factory and have him thrown in jail as early as February 2000. These agents (Steve Hines and Gerald Morgan (alias Vernon) also reached out to the FDA and commenced a long term investigation, attempting to identify any wrongdoing on Hinkson’s part that would justify a raid, arrest and his pretrial incarceration.
7. Hinkson, who is known to be a non violent individual, was falsely accused of being the head of two militias, a machine gun dealer and as having ‘followers who could do violent acts’ all such false accusations were designed to make it appear Hinkson was a terrorist type located in the hills of North Central Idaho.
8. By early 2000 Agent Morgan indicated that he was pursuing Hinkson’s case civilly as it pertained to unfiled tax returns. However, after Hinkson gave notice that he was demanding a Seventh Amendment civil trial on the tax filing issue, Morgan referred Hinkson’s case for criminal proceedings.
9. From approximately January 2000 until June 2002 the Government used administrative summonses to obtain Hinkson’s banking and credit records, and in the summer of 2001 began presenting information from the IRS and FDA investigation to a Grand Jury in Coeur d’Alene, Idaho. The Grand Jury did not issue a True Bill; so the information was submitted to a second Grand Jury in Boise, Idaho, in 2002. Likewise, no True Bill was issued against Hinkson by the time the second Grand Jury was excused in early April 2002.
July 17, 2002: First Indictment
10. An old friend whom Hinkson had hired at the WaterOz factory, and supported in other ways, turned him in to the IRS in 1998 for a reward when Hinkson refused to sign over part of his business to the friend and his wife. Hinkson had caught the man stealing from WaterOz and had fired him and his wife. Hinkson’s first indictment by the Untied States Government on July 17, 2002, concerned itself with Hinkson’s failure to file income tax returns, structuring (in the form of withdrawing cash from his own bank account to pay payroll) and FDA product labeling charges (all herein referred to as the "Tax Case").
November 21, 2002: Illegal Raid
11. The Government conducted an illegal raid on Hinkson’s home and business on November 21, 2002, using battering rams and armed with machine guns. He was immediately released on his own recognizance when no evidence of weapons or violence was was found or could be proven. Company records, computers and other property were seized.
12. The indictment in the Tax Case that was served on Hinkson November 21, 2002, had four components:
1. Income Tax [misdemeanor];
2. Employment Tax [felony];
3. Structuring under Money Laundering [felony with Forfeiture]; and
4. FDA product labeling charges which were the pretext for the November 21, 2002 raid and no knock search by the FDA, FBI and IRS [misdemeanors].
13. After the second grand jury was excused in early April, 2002, Hinkson filed a lawsuit against Assistant United States Attorney Nancy Cook and IRS Special Agent Steve Hines for harassment and improper conduct. At that point, Cook reconvened the Grand Jury and in one day, July 17, 2002, allegedly obtained a True Bill. This retaliatory move by Cook canceled Hinkson’s civil law suit.
14. Cook then moved to have the indictment sealed under the secrecy rules. For four months Hinkson did not know he had been indicted, but his competitor, ENIVA, had been told this crucial bit of information and used the same in it ’s attempt to gain an unfair competitive advantage.
February, 2003 to March 27, 2003: Undercover Agents Attempt to Entrap Hinkson
15. After almost two months of contact, Government informant J.C. Harding attempted to entrap Hinkson with a body wire on March 27, 2003. Harding and Hinkson had a rambling conversation that touched on the exploits of both, but never dealt with the purported murder for hire allegations until, at the end of the session Harding repeatedly stated that he could ‘get the job done’ (i.e., arrange for the three assassinations) if Hinkson would ‘just get serious’ and tell Harding, in fact, what it was that Hinkson wanted him to do.
16. On the tape, Hinkson continually maintained that he was ‘just suing these Feds’ and that he didn’t want to harm them. In fact, Hinkson made the point that he was using the law of their own ‘Babylonian’ system against them and denied wanting to cause physical harm to anyone.
17. While the tape is completely exculpatory, the Government has treated it as if it were inculpatory, deliberately misconstruing words used by Hinkson in order to perpetuate a fraud that Hinkson was acting in league with Harding to solicit murder. It was actually Harding that was vehemently soliciting Hinkson.
18. There is no evidence that Hinkson threatened anyone. Even though Harding (the undercover agent) repeatedly raised the issue of "murder for hire" of federal officials during the taped conversation, Hinkson never agreed with, confirmed or admitted he had such intentions. Hinkson, however, was incarcerated without bond or bail and was never given an evidentiary hearing as required.
April 4, 2003: Arrest
19. Based on what he DIDN’T say on the above tape recording, but what the Government imputed, i.e., that Hinkson had ‘followers’ who could take him up on his ‘offer’ to murder someone, Hinkson was falsely arrested on April 4, 2003, on the pretext that he had violated the conditions of his pretrial release from the July 17, 2002, indictment in the Tax Case by soliciting the murder for hire of three federal officials.
20. At the time of Hinkson’s arrest on April 4, 2003, by FBI Agent Long, Hinkson asked for attorney. There was a recording by Hinkson of the initial phase of the arrest, (by his personal tape recorder which was in his pocket.) When Hinkson ’s tape recorder was discovered at the time of the arrest Long ordered it to be turned off.
21. Agent Long lied under oath at the April 9, 2003, hearing, stating that Hinkson had not demanded an attorney. When Hinkson’s own recording was discovered in his personal belongings and transcribed by a court reporter, it was proven that Long had perjured himself regarding this matter.
302 Report: Denial of Existence and Subsequent Production of Same by Government
22. When a 302 Report of the alleged confession was requested during preparation for trial in the Tax Case, Wendy Olson, Assistant United States Attorney vehemently denied its existence. Such a 302 appeared at the time of the second indictment (discussed subsequently.)
April 9, 2003: Detention Hearing
23. Hinkson was subsequently FURTHER detained after a detention hearing on April 9, 2003, the outcome of which was based on unreliable three and four party hearsay allegations that he ‘solicited’ someone for the murder of three federal officers (a federal judge, prosecutor and IRS agent).
24. Detention was ordered after this ‘Kangaroo Court’ style hearing wherein Magistrate Judge Williams (who, according to observers, slept through most of the hearing) read from a prepared text finding Hinkson was a ‘ danger to the community’ and a ‘flight risk’ (18 USC 3142, et seq.).
25. The FBI agent was permitted to proffer mere hearsay statements of three alleged ‘witnesses,’ and an alleged confession by Hinkson into the record.
26. FBI Agent Long perjured himself as he lied under oath on four occasions during the hearing (about such things as whether Hinkson had demand counsel at the time of his arrest). All four lies were deemed by the Court to be inconsequential (i.e., the Court was complicit with the US Attorney in putting on a show but denying substantive justice.)
27. Hinkson was denied a de novo evidentiary hearing by the District Court Judge who later recused himself, denied review by the 9th Circuit Court of Appeals and denied certiorari at the United States Supreme Court.
April 26, 2004 May 5, 2004 : Eight day Jury Trial on Failing to File and Structuring
28. An eight day jury trial was had April 26, 2004, on failure to file income tax, failure to withhold and structuring. Hinkson previously pled guilty to two FDA misdemeanor counts based on his vicarious liability for strict liability offenses by an owner of a business (and not any actual knowledge by Hinkson as to such product defects) so the conviction was strictly related to Hinkson’ s supervisory role as a control person. (See United States Supreme Court Dauerwigt and Park decision.)
29. Even though Hinkson was vigorously defended on the failure to file tax returns based on the Cheeck case with the appearance of numerous witnesses who substantiated his long standing and strongly held good faith belief that he was not a person required to file and vigorously defended on the structuring charges as having used cash withdrawn from his own bank account to pay his business payroll for a number of years, while his small town credit union was unaware that it should have granted Hinkson a payroll exemption to the structuring law, he was found guilty on 29 counts.
30. Even though the structuring charges came about because Hinkson’s business manager withdrew two sums of money on each Thursday and Friday to meet payroll and it was clearly proven that there was no criminal conduct, Hinkson has paid $135,500.00 to the United States Government to settle the question of Forfeiture. An appeal is pending the sentencing in the "Tax Case" and will be affected by the recent Blakely decision.
31. Sentencing was set for July 31, 2004, but was postponed until after the trial in the second indictment.
June 23, 2004: Second Indictment
32. Hinkson has been incarcerated since April 4, 2003, on the theory that he was a danger to the community and a flight risk. His only crime in jail has been possession of a yellow highlighter pen which was previously permitted until the rules were changed to ensnare Hinkson. He has been starved and psychologically mistreated upon the orders of the Untied States Marshal’s office.
33. The alleged ‘threats’, or what was used as pretrial release violations now form the basis of a federal indictment from a March, 2004, Grand Jury in the form of an undated True Bill which was served on Hinkson June 23, 2004, and which concerned itself with alleged treats to hire an assassin to kill federal officials (the "Threats Case").
34. This case would seem to be a singular travesty of justice, except that the US Attorneys around the country are using the ‘murder for hire of a federal judge’ scenario as a regular means to detain certain high profile persons who have attacked the tax system. Tactical advantages of this allegation for the Government include:
1. The elimination of good ‘citizen oriented’ judges (such as Judge Lodge here) who might otherwise be predisposed to give the defendant a fair trial;
2. The ability to instantly incarcerate the defendant and keep him in jail;
3. The elimination of most of the eligible bar as defense counsel, in that criminal defense attorneys who practice in federal court generally refuse to take a case involving threats on the life of a federal judge in order to protect their own reputations;
4. Because of a loophole in the law created by Congress, the government is not required to prove the allegation of hearsay threats against federal officials by sworn testimony. All that is needed is a cooperating witness and the Assistant United States attorney can proffer enough unreliable hearsay evidence into the record to imprison an unsuspecting individual for years without bond or bail.2:46 AM 10/13/2008
2. Hinkson, a 48 year old white male, is an outspoken inventor/scientist who owns a sole proprietorship business known as WaterOz which produces dietary supplements, primarily in the form of ionized mineral waters . His business has been relatively successful and has an international network marketing distribution network. Gross yearly income of the company has reached as much as $3 million in 2002 and is just over $1 million currently.
3. Hinkson has a history of philanthropy connected with his business and has given his products to those in need such as veterans and the elderly who are unable to afford same, has worked in children’s tuberculosis clinics and has provided free product to the BOTHA Aids Clinics in South Africa. At the time he was initially arrested on November 21, 2002, fifteen doctors specializing in treatment of infectious diseases were awaiting his arrival in the Ukraine and his lectures concerning the use of WaterOz products in the treatment of tuberculosis and other diseases.
4. At the same time he was developing his ionized mineral process, Hinkson was active in the ‘Truth in Taxation’ movement through appearances on his own talk radio show and others in the mid and late 1990s.
5. Since the late 1990s, Hinkson has strongly advocated his own position with the IRS that he was not a ‘person required to file’ individual income tax returns nor was he responsible for withholding employment taxes from his WaterOz employees and repeatedly requested a hearing on his position. Immediately after he requested a Seventh Amendment Common Law civil trial concerning his position in March, 2000 criminal proceedings were brought against him.
Grand Jury Hearings 2001 2002
6. Former Idaho Department of Labor Case Supervisor Shawn McDonald testified under oath that IRS Agents Morgan and Hines had vowed to "raid" Hinkson’s factory and have him thrown in jail as early as February 2000. These agents (Steve Hines and Gerald Morgan (alias Vernon) also reached out to the FDA and commenced a long term investigation, attempting to identify any wrongdoing on Hinkson’s part that would justify a raid, arrest and his pretrial incarceration.
7. Hinkson, who is known to be a non violent individual, was falsely accused of being the head of two militias, a machine gun dealer and as having ‘followers who could do violent acts’ all such false accusations were designed to make it appear Hinkson was a terrorist type located in the hills of North Central Idaho.
8. By early 2000 Agent Morgan indicated that he was pursuing Hinkson’s case civilly as it pertained to unfiled tax returns. However, after Hinkson gave notice that he was demanding a Seventh Amendment civil trial on the tax filing issue, Morgan referred Hinkson’s case for criminal proceedings.
9. From approximately January 2000 until June 2002 the Government used administrative summonses to obtain Hinkson’s banking and credit records, and in the summer of 2001 began presenting information from the IRS and FDA investigation to a Grand Jury in Coeur d’Alene, Idaho. The Grand Jury did not issue a True Bill; so the information was submitted to a second Grand Jury in Boise, Idaho, in 2002. Likewise, no True Bill was issued against Hinkson by the time the second Grand Jury was excused in early April 2002.
July 17, 2002: First Indictment
10. An old friend whom Hinkson had hired at the WaterOz factory, and supported in other ways, turned him in to the IRS in 1998 for a reward when Hinkson refused to sign over part of his business to the friend and his wife. Hinkson had caught the man stealing from WaterOz and had fired him and his wife. Hinkson’s first indictment by the Untied States Government on July 17, 2002, concerned itself with Hinkson’s failure to file income tax returns, structuring (in the form of withdrawing cash from his own bank account to pay payroll) and FDA product labeling charges (all herein referred to as the "Tax Case").
November 21, 2002: Illegal Raid
11. The Government conducted an illegal raid on Hinkson’s home and business on November 21, 2002, using battering rams and armed with machine guns. He was immediately released on his own recognizance when no evidence of weapons or violence was was found or could be proven. Company records, computers and other property were seized.
12. The indictment in the Tax Case that was served on Hinkson November 21, 2002, had four components:
1. Income Tax [misdemeanor];
2. Employment Tax [felony];
3. Structuring under Money Laundering [felony with Forfeiture]; and
4. FDA product labeling charges which were the pretext for the November 21, 2002 raid and no knock search by the FDA, FBI and IRS [misdemeanors].
13. After the second grand jury was excused in early April, 2002, Hinkson filed a lawsuit against Assistant United States Attorney Nancy Cook and IRS Special Agent Steve Hines for harassment and improper conduct. At that point, Cook reconvened the Grand Jury and in one day, July 17, 2002, allegedly obtained a True Bill. This retaliatory move by Cook canceled Hinkson’s civil law suit.
14. Cook then moved to have the indictment sealed under the secrecy rules. For four months Hinkson did not know he had been indicted, but his competitor, ENIVA, had been told this crucial bit of information and used the same in it ’s attempt to gain an unfair competitive advantage.
February, 2003 to March 27, 2003: Undercover Agents Attempt to Entrap Hinkson
15. After almost two months of contact, Government informant J.C. Harding attempted to entrap Hinkson with a body wire on March 27, 2003. Harding and Hinkson had a rambling conversation that touched on the exploits of both, but never dealt with the purported murder for hire allegations until, at the end of the session Harding repeatedly stated that he could ‘get the job done’ (i.e., arrange for the three assassinations) if Hinkson would ‘just get serious’ and tell Harding, in fact, what it was that Hinkson wanted him to do.
16. On the tape, Hinkson continually maintained that he was ‘just suing these Feds’ and that he didn’t want to harm them. In fact, Hinkson made the point that he was using the law of their own ‘Babylonian’ system against them and denied wanting to cause physical harm to anyone.
17. While the tape is completely exculpatory, the Government has treated it as if it were inculpatory, deliberately misconstruing words used by Hinkson in order to perpetuate a fraud that Hinkson was acting in league with Harding to solicit murder. It was actually Harding that was vehemently soliciting Hinkson.
18. There is no evidence that Hinkson threatened anyone. Even though Harding (the undercover agent) repeatedly raised the issue of "murder for hire" of federal officials during the taped conversation, Hinkson never agreed with, confirmed or admitted he had such intentions. Hinkson, however, was incarcerated without bond or bail and was never given an evidentiary hearing as required.
April 4, 2003: Arrest
19. Based on what he DIDN’T say on the above tape recording, but what the Government imputed, i.e., that Hinkson had ‘followers’ who could take him up on his ‘offer’ to murder someone, Hinkson was falsely arrested on April 4, 2003, on the pretext that he had violated the conditions of his pretrial release from the July 17, 2002, indictment in the Tax Case by soliciting the murder for hire of three federal officials.
20. At the time of Hinkson’s arrest on April 4, 2003, by FBI Agent Long, Hinkson asked for attorney. There was a recording by Hinkson of the initial phase of the arrest, (by his personal tape recorder which was in his pocket.) When Hinkson ’s tape recorder was discovered at the time of the arrest Long ordered it to be turned off.
21. Agent Long lied under oath at the April 9, 2003, hearing, stating that Hinkson had not demanded an attorney. When Hinkson’s own recording was discovered in his personal belongings and transcribed by a court reporter, it was proven that Long had perjured himself regarding this matter.
302 Report: Denial of Existence and Subsequent Production of Same by Government
22. When a 302 Report of the alleged confession was requested during preparation for trial in the Tax Case, Wendy Olson, Assistant United States Attorney vehemently denied its existence. Such a 302 appeared at the time of the second indictment (discussed subsequently.)
April 9, 2003: Detention Hearing
23. Hinkson was subsequently FURTHER detained after a detention hearing on April 9, 2003, the outcome of which was based on unreliable three and four party hearsay allegations that he ‘solicited’ someone for the murder of three federal officers (a federal judge, prosecutor and IRS agent).
24. Detention was ordered after this ‘Kangaroo Court’ style hearing wherein Magistrate Judge Williams (who, according to observers, slept through most of the hearing) read from a prepared text finding Hinkson was a ‘ danger to the community’ and a ‘flight risk’ (18 USC 3142, et seq.).
25. The FBI agent was permitted to proffer mere hearsay statements of three alleged ‘witnesses,’ and an alleged confession by Hinkson into the record.
26. FBI Agent Long perjured himself as he lied under oath on four occasions during the hearing (about such things as whether Hinkson had demand counsel at the time of his arrest). All four lies were deemed by the Court to be inconsequential (i.e., the Court was complicit with the US Attorney in putting on a show but denying substantive justice.)
27. Hinkson was denied a de novo evidentiary hearing by the District Court Judge who later recused himself, denied review by the 9th Circuit Court of Appeals and denied certiorari at the United States Supreme Court.
April 26, 2004 May 5, 2004 : Eight day Jury Trial on Failing to File and Structuring
28. An eight day jury trial was had April 26, 2004, on failure to file income tax, failure to withhold and structuring. Hinkson previously pled guilty to two FDA misdemeanor counts based on his vicarious liability for strict liability offenses by an owner of a business (and not any actual knowledge by Hinkson as to such product defects) so the conviction was strictly related to Hinkson’ s supervisory role as a control person. (See United States Supreme Court Dauerwigt and Park decision.)
29. Even though Hinkson was vigorously defended on the failure to file tax returns based on the Cheeck case with the appearance of numerous witnesses who substantiated his long standing and strongly held good faith belief that he was not a person required to file and vigorously defended on the structuring charges as having used cash withdrawn from his own bank account to pay his business payroll for a number of years, while his small town credit union was unaware that it should have granted Hinkson a payroll exemption to the structuring law, he was found guilty on 29 counts.
30. Even though the structuring charges came about because Hinkson’s business manager withdrew two sums of money on each Thursday and Friday to meet payroll and it was clearly proven that there was no criminal conduct, Hinkson has paid $135,500.00 to the United States Government to settle the question of Forfeiture. An appeal is pending the sentencing in the "Tax Case" and will be affected by the recent Blakely decision.
31. Sentencing was set for July 31, 2004, but was postponed until after the trial in the second indictment.
June 23, 2004: Second Indictment
32. Hinkson has been incarcerated since April 4, 2003, on the theory that he was a danger to the community and a flight risk. His only crime in jail has been possession of a yellow highlighter pen which was previously permitted until the rules were changed to ensnare Hinkson. He has been starved and psychologically mistreated upon the orders of the Untied States Marshal’s office.
33. The alleged ‘threats’, or what was used as pretrial release violations now form the basis of a federal indictment from a March, 2004, Grand Jury in the form of an undated True Bill which was served on Hinkson June 23, 2004, and which concerned itself with alleged treats to hire an assassin to kill federal officials (the "Threats Case").
34. This case would seem to be a singular travesty of justice, except that the US Attorneys around the country are using the ‘murder for hire of a federal judge’ scenario as a regular means to detain certain high profile persons who have attacked the tax system. Tactical advantages of this allegation for the Government include:
1. The elimination of good ‘citizen oriented’ judges (such as Judge Lodge here) who might otherwise be predisposed to give the defendant a fair trial;
2. The ability to instantly incarcerate the defendant and keep him in jail;
3. The elimination of most of the eligible bar as defense counsel, in that criminal defense attorneys who practice in federal court generally refuse to take a case involving threats on the life of a federal judge in order to protect their own reputations;
4. Because of a loophole in the law created by Congress, the government is not required to prove the allegation of hearsay threats against federal officials by sworn testimony. All that is needed is a cooperating witness and the Assistant United States attorney can proffer enough unreliable hearsay evidence into the record to imprison an unsuspecting individual for years without bond or bail.2:46 AM 10/13/2008