On Sept. 17, Texas porn magnate John Kenneth Coil was sentenced to more than five years in the federal pen, assessed a $5,000 fine, and agreed to forfeit approximately $8.1 million in assets after pleading guilty earlier this year to charges of income tax evasion, mail fraud, and peddling obscenity. According to the feds, since 1981 Coil and his business associates several of them also family members developed and maintained an "illicit" criminal enterprise that defrauded the government of millions.
In a press release, government law enforcers including U.S. Attorney Johnny Sutton, Internal Revenue Service agent Martin Sheil, customs agent Alonzo Peña, and Dallas Co. District Attorney Bill Hill touted their victory in obtaining Coil's plea and sentence, the culmination of a years-long investigation code-named Operation Skimflick. According to the government, Coil developed a string of front companies (including one called Trinity Christians of America) to "run" his adult-store empire which includes 20 stores in Texas, most simply named "Adult Video," and others in Louisiana and Utah by shuffling cash and property in an effort to avoid paying taxes. (Three of Coil's stores are in the Austin area.) From 1981 through 2003, the government says, Coil failed to pay more than $4.5 million in taxes. The IRS "is dedicated to using its financial investigative expertise to ensure compliance with the tax laws and related financial statutes, whether the income is legal or illicit, as in this case," said Sheil.
But the feds seem particularly impressed with their success in getting Coil to plead guilty to a single count of obscenity, "involving ... interstate transportation" of the film Nympho Bride, a German-made hardcore porn flick. "Today's sentences should put those in the hardcore pornography business on notice that there will be a price to pay for violating our obscenity and tax laws," Sutton said. The remarks were sensational, if not downright overstated: Whether the transportation and sale of Nympho Bride is, in fact, a violation of federal obscenity law is, legally, a matter of opinion. In short, without the tax evasion case and related mail-fraud charges stemming from the mailing of tax returns it is unlikely that the feds would have had an obscenity case to bring against Coil, let alone one they could actually win.
Typically, commercial pornography is protected by the First Amendment's free speech provisions, but is subject to so-called "time, place, and manner" restrictions i.e., where an adult video or book store can be located. In contrast, obscenity legally defined as behavior so indecent that it is an "affront" to accepted standards of decency is not afforded any free-speech protection. But where, exactly, the line is drawn between the two isn't entirely clear. Back in 1973, in Miller v. California, the U.S. Supreme Court developed a three-prong obscenity test whether an "average person," applying "contemporary community standards" would find that the work, as a whole, appeals to "prurient interests"; whether the work depicts, or describes, in a "patently offensive" manner, sexual conduct as that is defined by state law; and whether the work, as a whole, lacks any literary, artistic, political, or scientific value.
Thus, the Miller test allows each community to decide for itself what constitutes obscenity which, in practice, makes it very difficult for prosecutors to win obscenity convictions. "It is almost impossible," said Scot Powe, a law professor at UT and First Amendment expert. "The standards are whatever 12 jurors bring to bear." For example, he said, Travis Co. prosecutors haven't secured an obscenity conviction in 30 years and it's been a decade since the feds have successfully prosecuted an obscenity case, which makes Coil's guilty plea so notable. Although Coil copped to an obscenity charge regarding Nympho Bride, he was indicted on obscenity (and racketeering) charges in connection with the transportation and sale of six other videos including Spanky's Big Ass Party and Wet Cotton Panties Vol. 5. Those charges were dropped.
But the odds haven't kept prosecutors from pursuing obscenity cases especially federal prosecutors (like Sutton) working under U.S. Attorney General John Ashcroft, who has made combating porn and obscenity a priority for his Department of Justice. Obscenity "invades our homes persistently" through mail, phone, VCR, cable TV, and the Internet, Ashcroft said in a speech to prosecutors in 2002. "This multimillion dollar industry, with links to organized crime, has strewn its victims from coast-to-coast," he said. "To prevent such debasement, the Department of Justice is committed unequivocally to the task of prosecuting obscenity."
Of course, the challenge is convincing adult consumers to accept Ashcroft's definition of obscenity. The adult entertainment industry is an approximately $10 billion per year business, turning profits not just for porn purveyors in Los Angeles' San Fernando Valley aka Porn Valley but also for mainstream companies such as Comcast, Time Warner, and DirecTV (a subsidiary of General Motors). In California alone, the adult entertainment industry employs 12,000 people and generates around $36 million per year in tax revenue in 2003, the adult video industry churned out 11,000 titles.
Nonetheless, the DOJ has earmarked millions to combat Ashcroft-defined obscenity (which potentially could include popular shows such HBO's Real Sex or Sex and the City, the Baltimore Sun reported earlier this year). And, experts say, Ashcroft's pursuit of smut-peddlers has supplanted other DOJ law enforcement activities including anti-terrorism efforts as the department's top priority. "John Ashcroft thinks terrorists are second. He's just bonkers about porn and obscenity," said Powe. "It's an attempt to legislate morality."
Indeed, in an effort to secure the first federal obscenity jury verdict in over a decade, Ashcroft has apparently turned to Mary Beth Buchanan, U.S. attorney for Pennsylvania's western district, and to the same set of prosecutorial tactics she used to send comedian Tommy Chong to jail last year for selling a glass bong over the Internet. Buchanan's office bought three videos online from porn video producers Extreme Associates and is now pursuing a federal obscenity case in Pennsylvania against the California-based company.
Meanwhile, Sutton and the federal gang are the new owners of 25 of Coil's adult businesses including Oasis Adult Video in North Austin, Adult News on Texas 71 in Garfield, and the Adult Video store near the Dell Computer campus in Round Rock along with valuable real estate both near those stores and elsewhere. Coil's land holdings near the Round Rock store alone, along with the store itself, are valued at more than $1.2 million, according to the feds, who also get to keep the contents of eight stores including all of the "rubber goods and novelties," which, reportedly, are slated for destruction.
According to court papers, Coil is free on bond pending an appeal of his sentence.
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