WHO'S CRAZY: THE IRS OR MR. MOODY?
(FORTUNE Magazine) – The super-rich have their share of eccentrics, but none more bizarre than Shearn Moody, 62, of Galveston, Texas, heir to a cotton-trading and insurance fortune. Moody's quixotic and paranoid behavior makes Howard Hughes look like the guy next door.
Over the past 25 years, Moody--who once built a slide from his bedroom window to a swimming pool where he kept pet penguins--has been tilting at windmills and battling other forces "conspiring" against him, namely the government and organized crime. He says he's hired and fired "several hundred" lawyers, including the late legal bad boy Roy Cohn. He has declared bankruptcy despite a family fortune in the hundreds of millions. He was jailed for bankruptcy fraud.
The Internal Revenue Service began circling Moody in the mid-1980s, eventually charging him with pillaging the family's Moody Foundation, which was established by Shearn's grandparents with $400 million in 1942 (that's some $3.7 billion in today's dollars). The Moody Foundation is supposed to fund projects that benefit the people of Texas, but the IRS accused Shearn of making tens of millions of dollars of grants that benefited just one Texan, himself. The IRS claimed Moody owed more than $14 million in taxes and penalties from this alleged self-dealing.
The just-concluded trial in the U.S. Tax Court of Dallas was, well, different. Much of Moody's testimony was haranguing against lawyers, including this exchange where he mentions a song he commissioned:
MOODY: "...this was my present back to the legal profession. And it is a comical strip about a hooker that becomes a lawyer that becomes a judge. And..."
MOODY'S ATTORNEY: "Please don't sing it." (General laughter)
The judge slogged through this and then dealt a significant blow to the IRS, ruling that Moody was "naive and lackadaisical" but "not a mastermind."
Moody was victimized by a series of shady grantees who took advantage of his belief that elements including gangster Meyer Lansky and former Texas governor John Connally were out to do him in. The grantees, some of them outright con men, scammed money to investigate these "subversives."
The court reduced Moody's fine and penalty to around $1.4 million. "A 97% victory," says Moody lawyer William Cousins of Dallas. And maybe a 100% loss for the IRS, since the likelihood that Moody will ever pay the fine is close to zippo.
--Andrew E. Serwer