Jury clears retired Salem cop of tax evasion; defense lawyer demands apology from NHAG

Jan. 13—CONCORD — A federal jury on Friday acquitted retired Salem police Capt. Michael Wagner of a single tax evasion charge stemming from his internet sales of assault rifles in the days following the Sandy Hook school massacre.

The acquittal, which came after about five hours of deliberations, prompted Wagner's defense attorney to say federal law enforcement and prosecutors pursued Wagner because he was a police officer and a gun enthusiast.

"The IRS, the ATF, the New Hampshire Attorney General, they all wanted to put a trophy on their mantle," said Mark Lytle, a former federal prosecutor who now handles white-collar criminal cases with Nixon Peabody.

The Friday afternoon verdict ended a week-long trial. The tax evasion charge involved the profits on sales of 36 assault rifles that Wagner purchased and then resold on the internet.

He used a 25% police discount to purchase the rifles from New Hampshire gunmaker SIG Sauer. The sales took place shortly after the December 2012 Sandy Hook school massacre, when fears escalated that the federal government would ban assault rifles, prosecutors said in filings.

Wagner maintained his innocence, and Lytle said the IRS never contacted him to demand tax payment or audit him. The agency just brought an indictment.

Wagner was the last member of the Salem Police Department to face repercussions following a 2018 audit into alleged shortcomings in the department.

The New Hampshire Attorney General investigated for more than two years, at times naming suspects. In the end, state authorities closed the investigation with one conviction — a non-criminal traffic violation.

The Wagner gun sales were unearthed during the investigation but were pursued as a tax case because of the statute of limitations.

The gun sales were not a crime; Wagner cleared every buyer with a criminal background check, Lytle said.

Lytle singled out Jane Young, the former deputy New Hampshire Attorney General, for pursuing Wagner.

"They all owe him an apology, including Jane Young," he said. "Putting him through this was a horrible thing. Nobody should be put through that."

Efforts to reach Young, currently the top federal prosecutor in New Hampshire, were unsuccessful. A spokesman for New Hampshire Attorney General John Formella said the agency had no comment.

Likewise, a spokesman for the office that prosecuted Wagner, Rachael S. Rollins, the top federal prosecutor in Massachusetts, said the office would not comment. Outside federal prosecutors often take over police-prosecution cases in neighboring states to avoid any conflicts.

Lytle said Salem Town Manager Chris Dillon had it in for the police command staff, so he went to the New Hampshire Attorney General with his complaints. The boulder started rolling downhill, and little attention was paid to the facts in the case, he said.

In the end, the $33,000 in income ended up being about $15,000, he said.

He said all Salem police officials who testified, even those called by the prosecution, praised Wagner's role as a firearms instructor and armorer for the department.

The tax evasion charge carried a maximum penalty of three years and $100,000 fine, but sentencing guidelines would have reduced the maximum penalty.