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NBA Referee Acquitted in Tax Case

January 16, 1999 GMT

PHILADELPHIA (AP) _ Steve Javie is not out of the woods yet.

The NBA referee still must meet with Internal Revenue Service officials to resolve his tax debt involving airline tickets he received from the league, but he has been cleared of income tax evasion charges.

``I think the acquittal of Steve Javie proved, as we have known all along, that no reasonable person would consider this conduct to be criminal,″ said Howard Pearl, general counsel for the National Basketball Referees Union. ``The problem is that the resources, emotional and financial, that are required to fight the government are more than most people possess.″

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A jury deliberated about five hours before returning the acquittals on four counts against Javie on Friday.

The 43-year-old Javie was the only NBA referee to plead innocent to charges that had tried to evade taxes on income he received by downgrading airline tickets provided him by the NBA.

Nine other referees were charged with tax evasion for failing to report as income the difference between the first-class ticket they were given by the league to travel to games and the coach tickets on which they decided to fly.

All but Javie pleaded guilty to the charges and most were sentenced to probation or short periods of house arrest and ordered to pay the taxes. Only one other referee went to trial, but Jess Kersey pleaded guilty several days into the trial this summer.

On Friday, the NBA reinstated seven referees who had been forced to resign because of the tax evasion charges. Javie was the only one of the referees who did not resign.

Javie had argued that he didn’t owe taxes on more than $84,000 in income over three years because the money was value earned from frequent-flyer miles, which are not taxed.

The referees’ contract entitles them to first-class tickets, or their financial equivalent, for any flight of more than two hours. Prosecutors admit the referees are allowed to downgrade tickets and take the difference in cash _ as long as they pay taxes on the income.

But defense attorney Greg Magarity said Javie used frequent-flyer miles to upgrade the cheaper ticket into a first-class ticket. Therefore, Magarity said the travel reimbursement money was the payment for the frequent-flyer miles; the IRS claims that same money was unreported income.