Familiar Interstate Highway 35 landmarks such as Adult Video, Oasis Adult Video and 24 Hour News could be shut down now that the owner, 61-year-old John Kenneth Coil, has pled guilty to federal charges in connection with racketeering, obscenity, fraud and income tax evasion.
A U.S. district judge last week ordered Coil to serve a five-year sentence in federal prison and to pay a $5,000 fine. Coil was also ordered to forfeit 45 Texas properties to the government and 27 "adult-oriented" businesses worth an estimated $8.1 million.
U.S. Attorney Johnny Sutton, who prosecuted the case, said Coil was one of the top-three purveyors of pornographic paraphernalia in the country. The court decision dismantles the bulk of an empire that Coil built throughout seven states in the Southwest over two decades, Sutton said.
Coil created a nonprofit religious organization in 1998 called the Trinity Christians of America, which operated his Louisiana stores for a profit. It transferred $1.5 million in false payments to other corporations Coil created, but the Trinity Christians never filed a tax return, according to prosecutors. The organization did no religious work whatsoever, Sutton said.
In court, Coil said he paid millions of dollars to the government in taxes and that any wrongdoing was due to "trusting his accountant too much."
"Operation Skimflick" included the cooperation of the IRS criminal investigation division, along with state, local and other federal law enforcement. The five-year effort helped dismantle Coil's businesses and convict seven other codefendants, including Coil's wife, son and daughter, said Alonzo Pena, special agent in charge at the U.S. Immigration and Customs Enforcement.
"It took years of investigation and risky undercover work to penetrate this criminal organization," Bill Hill, Dallas County district attorney, said in a statement.
Vincent Klink, a customs agent, oversaw the Austin arm of the investigation, which included wiretaps, planting an undercover agent in one of the stores for more than a year and making undercover purchases of videos that were deemed illegal and obscene.
The adult-video mogul entered into a plea bargain and pled guilty to the mailing of fraudulent tax returns and the transportation of obscene material over interstate borders. Court documents state that the taxes withheld amounted to as much as $4.5 million over 22 years.
One piece of evidence used against Coil was "Nympho Bride," a film imported from Germany.
Klink struggled to find the right words to phrase what made "Bride" illegal.
"There was no underage stuff," he said. "The only way to describe it is to say the tape contained scenes of 'extreme' sexual acts."
After items in each store have been confiscated, the properties themselves will be auctioned off. Klink said he would notify the municipalities in each area that they now have the opportunity to revoke the sexually oriented business licenses of the properties now owned by the government.
"It will help the community, I think, because that would keep it out of the hands of porn and obscenity distributors who would want to acquire the property," Klink said.
Coil's lawyer did not return phone calls.
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