Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 26, 1992 TAG: 9203260170
SECTION: VIRGINIA PAGE: B1 EDITION: METRO
SOURCE: VICTORIA RATCLIFF STAFF WRITER
DATELINE: LENGTH: Long
In sentencing the former tax lawyer and Vinton town attorney, U.S. District Judge James Turk said, "I feel you are a better person today than you were when these offenses were made. It is not the desire of the court to destroy you in any way."
Turk, who also fined Selbe $3,000, interrupted an argument by defense attorney S.D. Roberts Moore that Selbe, 46, should be treated no differently than two doctors Turk sentenced to probation for evading their taxes.
Turk told Moore that the doctors' cases were different.
"Neither one of them are lawyers. I didn't expect them to know tax law. We have here someone with a master's degree in tax law. He knows the law. He knows the seriousness. . . . Certainly he would know his obligation to file tax returns."
Turk asked Selbe why he stopped filing his tax returns in 1985.
"It was almost like a death wish," Selbe replied. "I have no explanation for it that makes sense - even for me."
Last summer, Selbe pleaded guilty to a felony charge of evading income taxes for 1983 by filing a false return and to two misdemeanor charges of failing to file tax returns for 1985 and 1986. He had faced a maximum of seven years in prison and a $450,000 fine. He voluntarily surrendered his license to practice law in August, with disciplinary charges pending.
Turk sentenced Selbe to three years for tax evasion and 18 months for the two misdemeanor counts but suspended all but six months of the sentence.
Selbe was indicted in 1990 on federal charges of evading federal income taxes for 1983 and 1984. The basis of the government's charge against him was that he took money from American Chemical Co. of Roanoke while serving as its president and did not report it on his income-tax returns.
The government's investigation also revealed that Selbe had not paid taxes for the 1985-90 calendar years.
He offered to plead guilty to the 1983 charge and to the two misdemeanor counts in exchange for the dismissal of the 1984 charge and an agreement from the government not to prosecute him for failure to file tax returns for 1987-90.
He never was charged with embezzlement because the statute of limitations had taken effect.
Selbe purchased American Chemical in 1979 with four other men he had engaged in several business ventures with - Vinton lawyer Richard Cranwell, a state delegate; lawyer Barry Flora; and real estate salesmen Gary Flora; and Carl Flora, father of Barry and Gary.
The company had been profitable in the late 1970s. But after the change in management, it hit hard times, largely because of Selbe's diversion of company funds, court records show.
An audit revealed that Selbe - who resigned from his private practice to become president of the company - routinely had diverted large amounts of money from American Chemical and then had the books falsified to cover up the diversions, court records show.
The investigation showed that Selbe diverted at least $138,500 in 1983 and $96,000 in 1984 from American Chemical to pay for notes on his investments or for his personal living expenses.
To conceal large checks that were made out to Selbe, bookkeeping records showed the checks as payment for company expenses such as paper products.
Assistant U.S. Attorney Karen Peters asked Turk to give Selbe prison time for his "complicated financial shenanigans."
Selbe hurt more people than just himself and his family, she said. He "used and abused and manipulated people who worked with him and who worked for him. He embezzled money from his partners and his friends, . . . the very people who welcomed him to Roanoke," Peters said.
"Frank Selbe had great gifts and great talents. . . . He had every opportunity to make a lot of money honestly," Peters added.
Selbe's wife, Victoria, was the only witness to testify at his sentencing. She said that the situation had been devastating for her husband. "I feel he has been socially castrated in this town," she said.
Victoria Selbe said her husband persuaded her to move to Roanoke from Syracuse, N.Y., when she married him, because of his love for his adopted community. But that has not been returned, she said.
"It's been terrible. People don't talk to him. He's suffered terribly. I can't put into words the pain he's suffered. . . . He's ruined, he's a ruined man. . . . I just want to get out of it. I want to start rebuilding, start over again," she said. "What more can they do to him?"
Under cross-examination by Peters, Victoria Selbe said she had worked as a designer before marrying Selbe and had filed income-tax returns each year. After the marriage, she admitted, she did not sign any tax returns for six years. She said she never asked to look at any joint returns.
"I gave him everything on behalf of me and assumed it was taken care of," she said.
Turk said he felt Selbe's "attitude and that of his wife is not what it should be."
The judge said he had the impression that the Selbes thought others also were guilty but that Selbe had been singled out for prosecution. "Each individual has to pay for his own transgression," he said.
Selbe told the judge he was sorry for what he had done. "In a situation like this, you get up in the morning with regret and you go to bed at night with regret. It's with me every minute."
But, he said, "I am a survivor. I am going to endure. I lost the self-respect I did have. I lost the respect of my peers. The Frank Selbe that used to be is not the Frank Selbe of today. . . . There's not a lot left of me at all."
by CNB