The Western clothing firm and fundamentalist churches founded by fugitive preacher Tony Alamo are in disarray and may face imminent financial collapse as the result of a recent IRS crackdown, attorneys for the clothing firm and government officials said Wednesday.
Agents for the Internal Revenue Service in June seized merchandise and placed liens on churches, clothing stores and other property linked to Alamo as partial compensation for $7.9 million in unpaid back taxes, IRS officials said.
Federal authorities said they also have filed liens on a 150-acre Saugus property occupied by the Holy Alamo Christian Church, where the flamboyant preacher is accused of directing the brutal beating of an 11-year-old boy.
FBI agents have unsuccessfully sought Alamo on child-abuse charges since the October, 1988, incident.
The seizures of hundreds of the glitzy denim jackets--valued at up to $1,400 each--and other Western clothing items at the "Tony Alamo of Nashville" retail outlet in Tennessee dealt yet another blow to the clothing business, already reeling from the negative publicity surrounding Alamo's flight from justice.
A Los Angeles attorney representing Alamo Designs Inc. said the June raid on the Nashville clothing store and subsequent legal actions had "destroyed" the company. Others close to the case said that because profits from the jackets are a major source of church financing, the church too is in jeopardy.
"They now are defunct," said Darrell Johnson, who is representing Alamo Designs in a lawsuit filed earlier this year against the Jewish Federation Council of Los Angeles. "Everything has been seized by the IRS. They literally closed their doors."
Johnson said the raid at the clothing company also is likely to end the lawsuit against the Jewish Federation Council. Alamo Designs charged that a federation spokeswoman had libeled the company by linking it to Alamo and his church. Alamo Designs contends Alamo is merely an employee of the company who plays no role in management decision.
"Due to the fact that the corporation (Alamo Designs) has been rendered insolvent, they will no longer go forward with the lawsuit," Johnson said. "They have no assets. They have nothing. They cannot afford to prosecute the action anymore."
Alamo Designs spokeswoman Ann Mann said, "The IRS has terribly damaged our company."
Robert Foltz, a Los Angeles County deputy district attorney who investigated the child abuse case, said a growing boycott of Alamo products has severely hurt Alamo's churches, which have about 500 members. He said some followers have been forced to leave church communes because the church no longer can afford to house them.
"Their retail sources have really dried up--a lot of boutiques withdrew their rack space," Foltz said. Because of the drop in sales, "the Alamo Foundation is uprooting hundreds and hundreds of people across the country who need shelter and other things. When the retail end dried up, the income back to the church dried up."
In a telephone interview from an undisclosed location, Alamo disputed reports that the church and the clothing business are in danger of collapse. He charged that the raids are part of a conspiracy directed by Pope John Paul II and President George Bush and vowed that the church and the business would recover.
"The government is framing us," Alamo said. "I don't owe the IRS a cent. And neither does the church. . . . They're a bunch of trumped-up charges."
Added Alamo: "These people think they've really got us now. But we're calling upon the Lord."
Since his flight from justice, Alamo has granted numerous telephone interviews with newspaper reporters and radio talk shows. Last year, Alamo told The Times that despite the federal manhunt, he was still designing the sequined, air-brush-painted denim jackets that have become his trademark. He said he simply used a fax machine to send in sketches from his hide-outs.
While a fugitive, Alamo has been spotted selling his jackets in Las Vegas stores. He even paid a quick visit to Los Angeles City Hall to have his picture taken with Mayor Tom Bradley, who said he was not aware of the charges.
But as word of the child-abuse charges against Alamo and five of his followers spread in the fashion world, several department store chains withdrew Alamo-designed clothing from their shelves. Alamo Designs also lost a contract with Warner Bros. to produce denim Batman jackets.
IRS officials said they believe Alamo is linked to several corporations, including the Tony and Susan Alamo Foundation Inc., the Music Square Church Inc., and 20th Century Holiness Tabernacle Church.
"We are basically alleging that there has been a transfer of property between Tony and Susan Alamo (Tony's late wife) as individuals and these corporations," said Dan Boone, a spokesman for the Nashville IRS office.
IRS agents filed liens against property in six states, including Florida, Oklahoma and Arizona, Boone said. In Arkansas, the IRS placed liens on a restaurant, shopping center and other buildings near the town of Alma.
Alamo owes $746,000 in personal income tax returns from 1977 through 1980, Boone said. The government also alleges that Alamo-related companies owe about $5 million in corporate income tax and about $1.6 million in unpaid employee withholding taxes, Boone said.
IRS agents confiscated property from a Nashville home linked to Alamo.
Federal agents also placed liens on property owned by Alamo, the Tony and Susan Alamo Foundation, the Music Square Church Inc, and the 20th Century Holiness Tabernacle Church. A hearing to decide whether to reinstate the tax-exempt status of the Tony and Susan Alamo Foundation is scheduled for Aug. 20 in U.S. Tax Court in Los Angeles.