AUSTIN, Texas — Dozens of adult video stores across Texas will be shut down now that a porn mogul and his son have pleaded guilty to skirting millions of dollars in taxes, federal officials said.
John K. Coil, 62 — accused of avoiding up to $5 million in corporate and income taxes — admitted in a plea deal that they mailed fraudulent tax returns and transported obscene materials, specifically a video titled “Nympho Bride.”
His son, John A. Coil, 23, admitted making false statements on a tax return.
Both men entered their pleas Friday.
“This case was based on religion,” the elder Coil said. “There are people in our community who want to control what other people watch.”
Prosecutor Tim Gallagher said the obscenity charge hinged on the line between legal and illegal pornography under federal law.
“It’s not that it portrays sexual conduct; it’s that it portrays it in a patently offensive way,” Gallagher said.
The sprawling federal case, which was scheduled to go to trial this week, dismantled the bulk of a porn empire that Coil had built throughout the Southwest over three decades, the Austin American-Statesman reported Saturday.
After initially seeking to seize 58 Coil-owned properties in seven states — worth about $9.7 million — the U.S. government agreed in plea negotiations to only confiscate 45 Texas properties, including houses, offices and at least two dozen adult video stores.
Prosecutors said video stores in San Antonio, College Station, El Paso and Houston could be closed within months.
Corporations were held in various names to hide income, avoid paying taxes and insulate Coil from law enforcement, court documents say.
For example, according to the court papers, Coil in 1988 created a nonprofit religious corporation, Trinity Christians of America Inc., which operated adult-oriented stores in Louisiana for a profit. The corporation transferred $1.5 million in “rent” and “loan” payments to other corporations Coil created, but Trinity Christian never filed a tax return, according to prosecutors. The corporation did no religious work, Assistant U.S. Attorney Mark Marshall said.
Five others, including the elder Coil’s wife and daughter, have pleaded guilty to tax fraud or evasion charges. John K. Coil faces the most severe sentence, up to 10 years in prison.