James C. Sexton, a California motel operator and self-described “master of tax,” had been teaching an online course called Principles of International Taxation for Robertson’s fully-accredited law school since the fall of 1999. Baxter Ennis, a school spokesman, said that when Sexton was hired to teach the course at the Virginia Beach, Va., school, “We had no reason to doubt [his] credentials…. Mr. Sexton presented that he had more than 30 years experience in international law.”
After a NEWSWEEK reporter raised questions last week with the school about Sexton’s qualifications and activities, however, Ennis characterized the school as “very concerned” and said that the matter would be placed under “expedited review by appropriate administration officials” of Regent University. Ninety minutes later, Ennis called back to say that Sexton had offered to resign his teaching post and that his resignation had been accepted. Sexton, who talked at length to NEWSWEEK several days before his resignation, did not respond to several calls asking for comment after the school disclosed the new development.
Questions about Sexton first surfaced when a NEWSWEEK reporter was looking into the details of a money-laundering investigation in the tiny Alpine principality of Liechtenstein, one of the world’s most notorious tax havens. In mid-July, under pressure from the United States and other countries to reform its legal and judicial systems, Liechtenstein prosecutors produced their first-ever indictment of Liechtenstein citizens on money-laundering charges. Although the indictment is still officially sealed, a copy of the document obtained by NEWSWEEK suggests that Sexton was identified by Liechtenstein authorities as an apparent conduit for money taken from American investors in an alleged stock swindle carried out by a Liechtenstein businessman and a handful of associates. Sexton was not charged in the Liechtenstein indictment.
But Liechtenstein authorities say that because questions surround the origin of the money used in the stock scam, they made a criminal referral from their investigation to the U.S. Justice Department and to the FBI in Washington. Justice Department officials declined to comment on the matter. But Sexton and a Miami lawyer who represents him, William Richey, acknowledged to NEWSWEEK that they had reason to believe that Sexton was currently under criminal investigation by U.S. authorities in connection with allegations referred to the United States by law enforcement officials in Liechtenstein.
The Liechtenstein indictment alleges that businessman Rudolf Ritter and associates cheated several obscure Liechtenstein entities-among them the Envelope Foundation and the Adder Foundation-by selling them shares in a mysterious German company at a price 50 percent higher than the shares were selling on Germany’s public over-the-counter market. The indictment suggests that the money used to buy the shares resold to the foundations originally was part of a sum of “several million dollars” which Sexton “had acquired from numerous American investors” and deposited in a Liechtenstein bank.
An appeals court in Liechtenstein last week temporarily rejected the stock-fraud indictment against Ritter and his associates, telling prosecutors that they would have to come up with more evidence to prove their case before criminal proceedings could go forward. But the appeals court refused to throw out the indictment entirely. The indictment also charges Ritter and others with laundering money for the Cali cocaine cartel of Colombia, but does not allege that Sexton had any involvement in this alleged activity.
In a telephone interview, Sexton acknowledged that U.S. investigators were “sniffing around” because of the Liechtenstein indictment and that he “welcomed” the U.S. inquiry. He claimed he had only become involved in the Liechtenstein business deals at the center of the investigation because he had good contacts in the country. He said he was hired as a troubleshooter by other American businessman to unfreeze accounts which had been frozen by Liechtenstein bankers after suspicions were piqued about the accounts’ true owners. “If I am a criminal, I’m not a very smart one,” Sexton said, insisting he had never touched any of the money at the center of the case.
A regular participant in international conferences on tax-policy and money-laundering law over the last several years, Sexton was friendly with some of the world’s top experts on money laundering and was listed as a member of the advisory board of a white-collar-crime study institute affiliated with the University of Florida’s law school. Sexton had been scheduled to present a workshop with his son, James Jr., on “trust, tax and inheritance protection” at the world’s most prestigious academic conference on white-collar crime, an annual symposium scheduled to take place at Britain’s Cambridge University next week. However, conference organizers say they canceled Sexton’s appearance after hearing stories they say made them nervous about Sexton. Sexton told NEWSWEEK that he, himself, had asked organizers of the Cambridge conference to cancel his workshop because he was in poor health.
NEWSWEEK initially got in touch with Sexton by e-mailing him at a Web site he operates called www.taxperts.com. The Web site offers an “asset-protection package” and “private seminars” and offers to help prospective customers learn about how “to own nothing and control everything,” how to “get lost and vanish off the screen and hard drive of the supercomputer” and “how to place bearer shares into a bank offshore to hide the identity of the true owners to protect your assets.” The Web site also offers advice on “where the CIA hides its money for covert operations offshore.”
Sexton has faced civil lawsuits on both American coasts accusing him of financial irregularities, though at least one major lawsuit against him and other defendants, accusing them of cheating investors in a scheme involving Liechtenstein, was summarily dismissed by a judge on legal grounds.
Documents entered as exhibits in a civil lawsuit filed against Sexton in San Luis Obispo County, Calif., where Sexton runs a beachside motel, allege that in the 1960s and l970s, Sexton failed the bar exam at least 24 times in three states and doctored law school records that he submitted to state bar examiners. After he finally passed the California State Bar exam in l977, Sexton was denied admission to the bar after a committee of examiners concluded that he lacked “good moral character.” According to court documents, the bar examiners based this rejection partly on Sexton’s alleged falsification of records about his background and partly on the fact that Sexton had pled guilty in an Oregon case in the late l970s to selling real estate without a license. (The conviction was set aside in l983.)
Sexton himself filed documents in a California court case showing that in the l990s he maintained a listing in the prestigious legal directory Martindale-Hubbell in which he claimed to have a “J.D.” law degree from the “University of Southern California at Los Angeles” But according to court records, although he sporadically attended law schools at both the University of Southern California and the University of California, Los Angeles, in the l960s, he never graduated from either. Sexton now claims to have a law degree from the Blackstone College of Law of Chicago, a law school whose existence officials of the Illinois State Bar Association could not confirm. California Bar records identify the Blackstone school as a mail-order law school and a spokesman for Regent University law school said that the Blackstone school was now defunct. Sexton could not be reached for detailed comment on his legal and academic background, and his lawyer said he could not comment on these issues until he had consulted further with Sexton.
