Feds try to unmask finances of Insane Clown Posse star

Detroit — Joey "Shaggy 2 Dope" Utsler, co-founder of infamous Detroit rap duo Insane Clown Posse, is dodging attempts by the Internal Revenue Service to collect taxes, a federal prosecutor said Wednesday.

The U.S. Attorney's Office asked a federal judge to force Utsler to produce financial records after ignoring or delaying attempts to determine how much he owes for 2011 and 2012, according to federal court records. The IRS says Utsler and fellow Insane Clown Posse rapper Joe "Violent J" Bruce owe a combined $379,783 in delinquent federal income taxes, records show.

His attorney, Farris Haddad, told The News on Thursday that "Shaggy is fully cooperating with the IRS to resolve this matter immediately following next week's 16th annual Gathering of the Juggalos festival."

The dispute is the latest federal entanglement for Utsler, and along with court records offers a peek inside the finances of a controversial group whose fans have been branded a gang by the FBI. The FBI labeled the group's fans, known as Juggalos, a "loosely organized hybrid gang" in a 2011 National Gang Threat Assessment report.

"This could lead to incarceration, no doubt about it, if he doesn't come through with the information," said Farmington Hills tax lawyer and former IRS agent Jerry Abraham, who is not involved in the case.

The petition comes one week before Insane Clown Posse holds its annual Gathering of the Juggalos fan fest near Columbus, Ohio.

"The timing is interesting," Abraham said. "The IRS right now has very precious and little resources and they want a little to go a long way. Clearly, they're trying to get some publicity."

Utsler, 40, of Davisburg also could not be reached Wednesday.

This isn't the first time the IRS has targeted Utsler.

The IRS accused Utsler of owing $162,417 in delinquent taxes on April 21, 2014, according to the Oakland County Register of Deeds.

The same day, the IRS slapped a $217,366 tax lien on Bruce, 43, of Farmington Hills, according to Oakland County records.

Both rappers allegedly owe delinquent federal income taxes from 2011 and 2012, according to copies of the tax liens obtained by The News.

The latest IRS dispute dates to early March 2015. That's when an IRS revenue officer sent a summons to Utsler. He was directed to bring his financial records to her office on March 31 so the IRS could investigate his tax liability for the years 2011 and 2012.

He never showed up, according to court records.

The IRS gave him one last chance. Again, Utsler never showed up for the May 19 meeting, according to court records.

The next day, his lawyer Marvin Karana asked for a one-week extension. The IRS agreed, but Utsler failed to comply with the May 27 deadline, according to the petition.

In June, his lawyer asked for another extension. The IRS refused.

"I no longer represent Mr. Utsler," Karana told The News on Wednesday. "I don't want to comment. It's pretty much confidential information."

The U.S. Attorney's Office filed a similar request Wednesday to force William Dail, president of Insane Clown Posse's record label, Psychopathic Records, to turn over financial records. The IRS is investigating the label's tax liability for 2012 and 2013.

The tax spat surfaced one month after an appeals court in Cincinnati heard arguments over the FBI gang designation. The case went to the 6th U.S. Circuit Court of Appeals after a Detroit federal judge said the U.S. Justice Department isn't responsible for how authorities use a national report on gangs.

The American Civil Liberties Union of Michigan says the free speech and due process rights of Insane Clown Posse and its fans are being violated.

rsnell@detroitnews.com