Cowtown Babylon

When Fort Worth oil tycoon Tex Moncrief accused his secretary of embezzlement, she says, he left out one important detail: their 16-year affair

"If you told me that 64 IRS agents would storm my office with sidearms holstered and boot heels trampling on my civil rights and my business reputation, I wouldn't have believed you," he said. He went on to describe as "extortion" the $23 million he paid in the settlement with the government.

Unlike the Lloyd jury, several Republican senators on the panel and in the Texas delegation--several of whom have received campaign contributions from Tex--offered their apology. "Mr. Moncrief was badly treated by the United States government," Sen. Kay Bailey Hutchison told reporters. Others even talked about a tax rebate.

One thing that Moncrief had long complained of in the government's handling of the investigation was the fact that the U.S. Attorney never unsealed the search warrant and supporting "probable cause" affidavit that were used to authorize the raid.

Moncrief got his wish this summer, when Coggins' office unsealed the documents and other records in the case--including the no-contest plea agreed to by Tex's company.

Coggins, who has been nominated to a federal judgeship, has come under criticism by some Republicans sympathetic to Moncrief's complaints.

The documents do much to tell the IRS' side of the story--which was not sought at the April 29 congressional hearing.

The sworn, 21-page probable cause affidavit prepared by IRS Special Agent Donald R. Smith shows that the agency had gone through scores of Moncrief tax statements and accounting records, some provided by former Moncrief comptroller Jarvis, before the raid.

The affidavit identified three "schemes" used by Moncrief and his accountants that "were designed to evade the payment of federal taxes."

First, there was the allegation that Tex submitted false gift and estate tax returns that "grossly" undervalued the oil and gas properties left to the family by his father, Monty, who died in 1986, and his widow, Elizabeth, who died six years later.

Properties worth as much as $190 million were valued at $12.5 million, which allowed the oil and gas fields to pass to the next generation without payment of inheritance taxes. "Working papers showed that the oil and gas properties were valued not by an independent petroleum engineer but by Tex Moncrief, who used extremely low multipliers in order to grossly undervalue these properties," Smith wrote.

The affidavit cited accounting documents giving the IRS "probable cause" to believe that Tex deducted as business expenses personal perks such as a jet used to fly to vacation homes and salaries for a chauffeur and handyman.

It also cited three other instances in which assets were transferred between Tex and his mother, or Tex and his sons, without payment of gift taxes.

Moncrief, in an interview, denied he did any of the things alleged in the affidavit and said the government "didn't do right" by keeping the allegations sealed for four years.

He says he plans to keep speaking out against the IRS investigation of him, and is looking forward to his civil suit against his former chief accountant, which is scheduled for trial in October.

"I sort of like my reputation," he says, when asked how all of this is reflecting on it. "It's a good one."

And Lloyd herself may keep things simmering. Hinton says he is preparing to file Lloyd's suit against Tex for defamation and malicious misuse of the criminal justice system.

In the meantime, Lloyd has found a job as a waitress in a Mexican restaurant in Coppell, where she pulls down $2.16 an hour plus tips. "I like my job," she says. "I'm a good waitress, and I have a fair boss.

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