‘Girls Gone Wild’ Founder Faces I.R.S.

As founder of the “Girls Gone Wild” franchise, Joe Francis has often been accused of duping women into doing things they wish they had not, especially baring their breasts in front of a video camera.

This time, it is Mr. Francis who says he was fooled — not by a cameraman, but by his accountant.

The veracity of his claim is likely to be decided in September, when Mr. Francis will be tried in Los Angeles on federal charges that he deducted $20 million in fraudulent expenses on the corporate tax returns filed by his company, Mantra Films.

If convicted, he could face up to 10 years in prison and $500,000 in fines. Even if he is acquitted, the Internal Revenue Service could still seek back taxes, plus penalties and interest.

Joe Francis, "Girls Gone Wild" creator.
Joe Francis, "Girls Gone Wild" creator.

Mr. Francis says that his internal accountant set him up, filing the 2002 and 2003 tax returns in question for Mantra Films and then blowing the whistle to the I.R.S. with the goal of reaping a bounty for turning in a tax cheat. On July 25, Mr. Francis filed a civil suit in Los Angeles Superior Court against the accountant, Michael Barrett.

Mr. Barrett did not return calls for comment, and prosecutors said they would not speak about their case against Mr. Francis.

Mr. Francis, 35, is no stranger to controversy, or to paying fines, or to spending time in jail. He recently spent 11 months in jail on charges originally arising from complaints that he filmed girls younger than 18 without their clothes in Florida. He also pleaded guilty to bringing contraband — sleeping pills, prescription drugs and $700 in cash — into a Bay County, Fla., jail. Since 2002, various young women in his videos and promotions have sued him, contending they were tricked.

Steve Wynn, the casino mogul, is suing Mr. Francis, claiming he owes a $2 million gambling debt. Mr. Francis contends that Mr. Wynn deceived him into high-stakes gambling, in part by providing prostitutes. Mr. Wynn denies the allegation.

On March 21, four additional women who said they were younger than 18 — the youngest said she was 13 at the time — when filmed in Florida in 2003 and even earlier sued Mr. Francis. In June, the women’s lawyers filed an amended complaint seeking class-action status.

These legal disputes have kept Mr. Francis in and out of court. But this time, he is doing battle with an antagonist with enormous influence — the I.R.S. Federal prosecutors indicted him on charges of tax evasion in April 2007. Last month, he pleaded not guilty and a trial was scheduled for Sept. 16 in Los Angeles.

Mr. Francis, who says he is a victim, pointed out that his media empire — which sells DVDs of college students partying on spring break, getting drunk and being coaxed to take off their clothes — was one that many people would like to shut down.

“I’ve been called everything from a rapist to a drug trafficker to a racketeer to an obscenity pornographer,” Mr. Francis said in a recent telephone interview.

“I’m not selling Bibles, you know,” he said. “At the end of the day, I’m selling naked girls. People want to buy naked girls.”

Raised in Laguna Beach, Calif., Mr. Francis worked in reality television at first, then began buying grisly news footage for his own direct-marketing business, called Banned From Television. After finding a clip of Mardi Gras in New Orleans, in which women were lifting their T-shirts, he founded Mantra Films in 1997 and established his “Girls Gone Wild” business.

Today, Mantra Films, which is closely held and controlled by Mr. Francis, has about 300 employees, though some are part time, said Robert E. Barnes, one of his lawyers. Though true numbers are hard to pin down, Mr. Barnes estimated that revenue last year was about $100 million.

Mr. Francis said that all the controversy had been good for his business. Mr. Barnes sees another side to it.

“His business was hemorrhaging money while he was inside,” Mr. Barnes said, “because he was not able to do his marketing thing. And his current bail conditions are also impairing his business ability to go out and market himself and the company the way he needs to.”

“A lot of people don’t like what he markets”

Like many Hollywood celebrities, Mr. Francis derives much of his value from “interpersonal marketing,” Mr. Barnes said. “To the degree Joe is able to be out there — people see Joe, hear Joe, see good and positive things about Joe — then that helps his business.”

Donald J. Trump, the real estate mogul, says that Mr. Francis is good at his business. “He’s a smart guy. He’s a brilliant marketer,” said Mr. Trump, who has scheduled Mr. Francis to appear on his NBC television show, “Celebrity Apprentice.”

“A lot of people don’t like what he markets,” Mr. Trump said. “But that’s a different subject.”

For now, Mr. Francis is fighting legal battles on two coasts. He was jailed in Florida in April 2007. He pleaded no contest in March to criminal charges of prostitution and child abuse in Florida; he says now that he entered the plea just to get out of jail. Mr. Francis had since been transferred to a jail in Nevada after the federal tax-evasion charges took precedence jurisdictionally over the earlier Florida case.

“I spent four months longer than I could have,” he said, “because I was saying that I wasn’t going to plead.” He changed his mind, he said, when a fellow inmate killed himself and Mr. Francis saw guards hauling the body.

Mr. Francis and his lawyers will hold a news conference on Tuesday announcing their plan to file a suit to have the no-contest settlement in Florida rescinded, as well as to ask for $300 million, claiming civil rights abuses from law enforcement officials in Panama City and Bay County, Fla.

Mr. Francis is represented by Mr. Barnes and Robert G. Bernhoft of Bernhoft Law, a boutique firm based in Milwaukee that specializes in tax-law defense. The firm defended the actor Wesley Snipes earlier this year against felony charges of tax evasion; he was acquitted of the most serious charges by a jury in Florida.

The same lawyers are representing Mr. Francis in Los Angeles, where part of his legal strategy will be to argue against the I.R.S. bounty system. Mr. Francis says he was out of town when the returns for Mantra Films were filed and never reviewed them. Mr. Francis’s lawyers say that any mistakes in the returns were made by Mr. Barrett, without telling Mr. Francis. Mr. Barrett, as chief financial officer and controller of Mantra Films, was qualified to sign the returns, they say.

“Here’s the danger of the I.R.S. bounty system,” Mr. Francis said. “Should there be some kind of system? Yeah. But it shouldn’t be your accountant who prepares and signs and creates your return; he shouldn’t be allowed to collect.”

Even if Mr. Francis were put behind bars again, his business could continue. “It survived when he was in prison before,” said Paul Fishbein, president of AVN Media Network, which follows the sexually explicit film and video industry. “He has sort of a well-oiled machine there. So my guess is, yeah, people go to jail and their businesses run. If he has good people, which I believe he does, then I think it can.”