I-Team: What's Next for Medical Mafia Insider Howard Awand - 8 News NOW

Chief Investigative Reporter George Knapp and Photojournalist Matt Adams

I-Team: What's Next for Medical Mafia Insider Howard Awand

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LAS VEGAS -- It took a Federal Court jury only three and a half hours to agree on a guilty verdict in the tax trial of Medical Mafia insider Howard Awand and his wife. The Awand's were accused of failing to pay millions in taxes from the money they earned working on personal injury cases in Las Vegas. Soon, they could be headed to prison.

It's been five years and two days since the Channel 8 I-Team first broke the story about the existence of the FBI's Medical Mafia investigation.

Local doctors and lawyers earned hundreds of millions of dollars by working with so-called fixer Howard Awand, who told the court that the attorneys he worked with were so lazy, that Awand had to prepare most of the cases himself.

Awand's defense lawyers relied on the stupidity defense -- admitting the Awand's were pretty dumb about their taxes. It looks like the jury agreed.

Awand was a sharp and likeable witness who told the jury he was a smart enough businessman to earn nearly $9 million in four years by working with lawyers and doctors on personal injury cases, but was a knucklehead when it came to paying his taxes. Awand and his wife Linda admitted they owed $2.5 million in taxes, which is now nearly $3.5 million with penalties, and that they failed to file at all until years after the forms were due. But they asked the jury to trust them in their claim that they always intended to pay at some point, and most importantly, that they were completely unaware anyone could go to prison for not paying their federal taxes.

But Prosecutor Steve Myhre proved trust is not Awand's strong suit. In a withering cross examination, Myhre got Awand to admit to numerous lies in his personal and professional life. Awand did not, as he claimed, serve in Vietnam. He had not, as he claimed, worked for the CIA. He is not a lawyer -- a claim made on a loan application to buy a Bentley. And he is not a cousin to attorney Bob Vannah.

Vannah is a personal injury lawyer who used Awand to coordinate several huge personal injury cases and settlements and is believed to be a target of the ongoing FBI investigation.

Awand told the jury he had failed to pay his taxes for four years, in part, because his bookkeeper dropped the ball. He didn't replace her, he says, because she was ill and he wanted to be a nice guy. Then, his tax accountant quit on him but he didn't find out for two years.

Awand's attorney told the jury that its un-American to send someone to debtors prison for not paying what they owe, even a tax debt. The lawyer accused the government of unfairly influencing the jury by pointing to millions of dollars in lavish spending by the couple -- cars, homes and antiques. Myhre responded by pointing out the Awand's had the money to pay their taxes but chose instead to buy mansions and luxuries because they thought they could get away with it. The jury agreed.

The Awand's face up to four years in prison but won't be sentenced until April 2010.

In February, Awand will go on trial for conspiracy alongside attorney Noel Gage. One of the key witnesses against the two will be their former co-defendant, Dr. Mark Kabins, who pled guilty. Will the government use the tax conviction to convince Awand to cooperate, not only against Gage but other Medical Mafia targets? As one insider put it, Awand knows everything.

Defense attorney James Oronoz says he will ask for probation, adding there is nothing to be gained by putting the Awand's in prison, since they would not be able to pay what they owe.

The U.S. Attorneys Office declined to comment on this story, probably because they have another prosecution of Awand scheduled to start in one month and don't want to aggravate the presiding judge.

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