Radio host sentenced for tax evasion


Radio: John Luther Katsafanas, host of a weekly financial advice show on WCBM, tries to divert attention away from the charges.

March 14, 2001|By David Folkenflik | David Folkenflik,SUN TELEVISION WRITER

John Luther Katsafanas is a garrulous guy always working an angle, whether in his office, on the phone, or on the air during his weekly WCBM radio show offering financial tips to prospective Baltimore homebuyers.

Take two conversations with him this week, for starters.

Katsafanas was trying to talk The Sun out of writing about his being sentenced Friday by a federal judge to serve 12 months and a day after pleading guilty to two counts of tax evasion.

He had, according to sentencing papers, failed to file any tax returns for the years 1977 through 1991. Court documents show Katsafanas acknowledges not filing any returns for 1995, 1996 and 1997 - years in which he made hundreds of thousands of dollars and knew that the IRS was on his trail. He was ordered to pay back more than $460,000.

The charges, he explained, were unimportant. They were based on inflated figures and mischaracterizations: The paper shouldn't make too much out of them. The Baltimore County resident said even his age was wrong - it was listed as 54 by prosecutors - but wouldn't offer the correct age.

Instead, Katsafanas made vague promises of scoops about questionable appraisals of housing stock.

Yesterday, he became even more direct. "There would be a lot more interesting stuff for you, if you hold off," said Katsafanas, a mortgage loan officer at U.S. Mortgage Finance in Towson. "The more I think about it, the more it gets involved. It could get into the millions. I can give you things like that. A lot of rumors I hear."

I politely declined.

A good citizen, Katsafanas promised to send along a packet detailing his suspicions of housing fraud to assistant U.S. Attorney Barbara S. Sale.

And how does Katsafanas know Sale? She's the prosecutor who pursued his case.

"I've never seen anybody who didn't pay his taxes for as long as this," Sale said yesterday. "I thought it was significant, although I'm not one of his radio fans."

Said acting U.S. Attorney Stephen M. Schenning, "It's just amazing, the people who don't file income tax returns. A psychologist, which I'm not, could probably have a field day with the motivations."

In court, Katsafanas told U.S. District Judge Andre B. Davis he had been distracted by his daughter's substance-abuse problems and by his relatively recent adoption of her sickly infant.

Katsafanas' declaration of bankruptcy last month does not relieve him of the obligation to pay off his tax-related debts. The judge responded to Katsafanas' pleas by recommending that he be allowed to serve his time in a halfway house, giving him the chance to continue earning pay, even after he enters the federal system sometime next month.

The future of his beloved radio show is less clear.

For seven years and a week, Katsafanas has appeared on WCBM-AM (680) Sundays at 2 p.m. He issues a cascade of financial advice for potential purchasers of new homes and also a steady stream of personal asides.

At one point on Sunday, he chastised a real estate agent for arranging dates for him with women he deemed unattractive. "I got rid of that 150 pounds of ugly fat when I divorced my wife," Katsafanas said.

Katsafanas' legal trouble was news to Bob Pettit, station manager for WCBM. (Pettit's unofficial motto: "We love controversy!")

"People call into his show," Pettit said yesterday. "He's a very exciting guy."

Later, after conferring with a lawyer about the tax convictions, Pettit said he had suspended the show.

Katsafanas tends to reach lower-income listeners who may be first-time buyers, many of whom he prods to call him at the office or after hours at home to work out a mortgage. What they may not know is that he buys the time from WCBM - that, as he puts it, his show is really an advertisement for his business. The cost for a weekend hour on WCBM usually goes for $300 to $800.

"I'm giving good advice out there," Katsafanas said.

On Sunday's show, he gleefully recounted his version of an encounter with an official at the U.S. Department of Housing and Urban Development, whose appraisals of a house at $104,000, he said, would cost a client dearly.

"We called HUD and said that's way too much. Then HUD lowered the price to $93,600," Katsafanas said. "We lied! We lied!"

Asked yesterday about those comments, Katsafanas disowned them. "You can't call HUD and get them to lower it," he said. "That's not the way that process works. HUD reduces prices all the time. I was just saying it was lowered."

His professional and personal lives have little to do with his radio show, Katsafanas said this week in arguing against this article, later adding that he's only been on the air for two or three years. In fact, he started in March 1994.

"It's not a major audience at all," he said. "How many people listen on a Sunday afternoon? It's just whoever happens to be driving."

Voluble to the last, Katsafanas is the only radio show host I've ever encountered who claimed that his audience was too small to matter.

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