The founders (and current majority owners) of Air America Radio, Sheldon and Anita Drobny, are no strangers to schemes that run afoul of the law. Sheldon and Anita peddled tax shelters in the late 1970’s before they were caught by the IRS. From FindLaw:
During the late 1970’s, Sheldon Drobny, a former IRS agent, was a partner in the accounting firm of Adler & Drobny, Ltd., based near Chicago, Illinois. Drobny promoted (and he and his wife invested in) two “research and development” programs purportedly designed to develop the substance known as “aloe vera” for commercial purposes. “Aloe vera” is an extract of the Aloe Barbadensis plant, and today is used in many skin-care and personal hygiene products. The Drobnys, on their joint federal income tax return for 1979 (prepared by Sheldon Drobny), claimed certain losses as deductions in connection with their investment in the aloe vera research and development programs. In 1983, the Illinois District Director of the IRS (based in Chicago, Illinois) disallowed these deductions, after determining through investigation that they were part of an impermissible “tax shelter” scheme, and informed the Drobnys that they were liable for a $10,877 tax deficiency. The District Director also notified Sheldon Drobny that he was liable for a civil fraud penalty (or “addition to tax”) in the amount of $5,439.
…On June 26, 1986, the Tax Court entered its decision in Drobny I, ruling in favor of the IRS. The opinion, authored by Judge Simpson, concluded that the Drobnys were not entitled to claim losses arising from the aloe vera programs’ research and development expenditures as deductions on their jointly-filed 1979 return. The court disallowed these deductions because of compelling evidence that “the investment programs entered into by the petitioners were primarily intended to produce tax savings without any significant likelihood of an economic profit.” The tax tribunal also found that Sheldon Drobny was liable for a civil fraud penalty (or “addition to tax”) under 26 U.S.C. sec. 6653(b), reasoning that he had “[known] that some or all of the research and experimental expenditures arising from the programs were not deductible and . . . intentionally reported losses [as deductions] . . . on his 1979 income tax return, resulting in a fraudulent underpayment of tax.” The court in its opinion referred to the evidence of Sheldon Drobny’s fraudulent conduct (i.e., his knowingly claiming impermissible deductions) as “considerable,” noting that in light of Drobny’s expertise, knowledge, and sophistication in the area of tax law, it was highly improbable that he had unknowingly claimed impermissible deductions.Hugh Hewitt has more on the numbers behind the Air America/Gloria Wise Club loans.