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Walter Anderson agrees on a big number

March 31, 2011

An alert reader points us to a Tax Court document where Walter Anderson agreed that his IRS deficiency for 1998 and 1999 is $141,497,773, not counting penalties of $105,984,341. The agreement says there is no deficiency for the prior three years.

Mr. Anderson was pleaded guilty in what was billed as perhaps the largest individual tax evasion case ever. After the plea, there was a dispute over whether Mr. Anderson would have to pay the taxes. That seems to be settled. Since he has claimed he is indigent, the actual amount may be academic.

Mr. Anderson was a telecom entrepreneur with an interest in space travel. Owing the IRS $247 million, not counting interest, may keep his feet on the ground for awhile, even after he finishes his prison term.

Link: Complete Tax Update Walter Anderson coverage.

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Tax Court: Walter Anderson has to pay up.

February 26, 2009

The man convicted of what was called the "largest individual tax evasion case in U.S. history," is still fighting. Walter Anderson, a telecom entrepreneur who is serving a nine-year prison sentence, argued in Tax Court that he was innocent of tax fraud, despite of his guilty plea on federal tax charges.

When tax fraud is involved, there is no statute of limitations on asserting a tax liability. Absent fraud, the IRS would be unable to collect the taxes. Considering that the IRS says Mr. Anderson owes $183,779,618 for 1995-1999, the stakes are reasonably high. The IRS is also asserting the 75% fraud penalty for an additional $137 million or so.

The IRS says that his guilty plea for 1998 and 1999 prevents him from fighting fraud penalties for those years. As the guilty plea didn't cover 1995-1997, he can still argue that he didn't commit fraud then in fighting collection.

When Mr. Anderson was convicted, there was a little kerfuffle over his plea agreement, which didn't specifically require restitution of unpaid taxes. An appellate court later reopened the door to collection. It may not make much difference. His deficiency and penalties for 1998-1999 alone total over $253 million, and he has argued that he is indigent. As he argued his Tax Court case without a lawyer, it's not clear that he has much ready cash to give the IRS.

Cite: Anderson, T.C. Memo 2009-44.

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Walter Anderson has to pay up

November 17, 2008

The D.C. District Court of Appeals ruled last week that Walter Anderson, who is serving a 9-year sentence after pleading guilty to evading taxes on $450 million in income, also has to pay the taxes. The ruling overturns a district court opinion that said a flaw in the plea bargain let him off the hook.

More Coverage from Russ Fox.

Link: DOJ press release

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WALTER ANDERSON GETS NINE YEARS

March 28, 2007

Walter Anderson, the telecom entrepreneur who pleaded guilty in the largest individual U.S. tax evasion case to date, received a nine-year prison sentence yesterday.

Mr. Anderson pleaded guilty to moving $450 million offshore to avoid taxes. Oddly, the sentencing judge declined to order restitution of the unpaid taxes, blaming a poorly-worded plea agreement. This requires the IRS to go through the civil court system in separate collection proceedings.

Given the size of the tax loss, Mr. Anderson could have gotten the maximum 10-year sentence requested by the government. He would have been eligible for a much longer sentence if he had been convicted of all charges in the initial indictment.

Links:

Washington Post
Bloomberg
TaxProf Blog

Complete Tax Update Walter Anderson Coverage

JusticeForWalt.com

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'BIGGEST TAX EVASION CASE' ENDS WITH GUILTY PLEA

September 08, 2006

Telecom millionaire and space exploration figure Walter Anderson pleaded guilty to two counts of tax evasion and one count of tax fraud today. The plea deal settles criminal charges that he evaded taxes on $450 million of income. By pleading the case down to two evasion counts and a fraud count, he reduced his maximum sentence from 80 years to 10 years, according to the Associated Press. This was billed as the biggest personal tax evasion case ever, at least in terms of the amount of tax at stake.

Given the size of the tax loss, don't be surprised if he gets the maximum sentence. Assuming the judge will use the current sentencing tables, the $170 million tax loss that the government alleges puts him at offense level 32. The lowest guideline sentence for that offense level is 121 months. Given the "sophisticated means" that the indictments alleged, it's hard to see that sentence getting below the maximum 120 months.

Mr. Anderson is said to be an "Anarcho-Capitalist":

Anarcho Capitalists argue that private enterprise can provide law enforcement, and the market place can resolve disagreements about what the law is and what the law means

Maybe this means the plea agreement will call for him to go to a Wackenhut facility.

Links:

Complete Tax Update Walter Anderson coverage

TaxProf Blog coverage

More Links:

Washington Post
Bloomberg.com

Wall Street Journal ($link)

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TELECOM MILLIONAIRE ANDERSON STIFFING HIS LAWYERS?

August 12, 2005

published report says the man charged with the largest individual tax evasion in U.S. history has stopped paying his lawyers:

Lawyers for Walter Anderson filed a motion in U.S. District Court in Washington to withdraw from the case because of their client's "inability to pay his attorney fees."

"While counsel understands that Mr. Anderson has made efforts to obtain the funds ... his inability to do so, regrettably, has resulted in a deterioration of the attorney-client relationship."

Yes, that will do that. No money, no honey, as they say.

Mr. Anderson, who is accused of stashing over $450 million offshore to avoid taxes, may request a court-appointed attorney. The prosecutors aren't having it:

"The government does not believe the defendant to be indigent," the U.S. Attorney's Office wrote, adding that Anderson has repeatedly offered to pay a substantial bond in exchange for his release.

Well sure, but that's different. Lawyers might get you off, but if you pay bond and flee somewhere with no extradition, you avoid jail for sure.

Prior coverage: NO BOND FOR WALT.

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NO BOND FOR WALT

March 16, 2005

Walter Anderson has lost his bid for freedom pending his trial on evading $250 million of taxes. A federal judge today ruled that Mr. Anderson is a flight risk and must await trial in jail.

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WALTER ANDERSON: FLIGHT RISK?

March 11, 2005

The Government yesterday told a judge that telecom entrepreneur and space buff Walter Anderson should be denied bail while he awaits trial on tax evasion charges. The government opposed bail on the grounds that Mr. Anderson's overseas holdings and make him a flight risk. The government also said that books owned by Mr. Anderson on hiding assets and disappearing also are evidence he might flee.

Mr. Anderson is accused of evading taxes on $450 million of income. The Washington Post reports that the judge will make a bail decision today or Monday.

The Post also reports that Anderson has hired a new lawyer, Abbe D. Lowell. Mr. Lowell represented Gary Condit when the former Congressman's intern, Chandra Levy, disappeared.

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WALT ANDERSON - TAX CHEAT, OR MISUNDERSTOOD PHILATHROPIST?

March 07, 2005

In a jailhouse interview with the Washington Post, Walter Anderson says that he wasn't evading taxes on $450 million; he was just getting ready to give it away. He told the Post:

He was going to use the money to change the world. To fight for arms control and human rights. To promote family planning and space exploration. He was going to give the money away, starting next year.

"I don't need to steal money from the U.S. government to be successful," Anderson said in a wide-ranging 2 1/2-hour interview. "I don't want their money."

With all of those interests, no wonder he needed to stash it overseas before giving it away.

Mr. Anderson is awaiting a March 11 court appearance in jail after a U.S. Magistrate Judge denied him bail. The judge decided that his houses around the world, his fake British Guyana passport, and his possession of books about hiding assets and disappearing made him a flight risk.

Mr. Anderson has had brushes with the law before, but for lower stakes. In the 80s, according to the Post, he campaigned against car-pool lane restrictions as "government interference in people's private affairs" and was repeatedly ticketed for violating them.

Mr. Anderson told the Post that he made a good-faith effort to file tax returns on time and accurately. As he apparently still hasn't filed tax returns for 1987-1993, good faith must only get you so far.

Hat tip: The TaxProfs MSM Tax Roundup.

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MAYBE HE SHOULD HAVE MOVED TO THE SPACE STATION

March 01, 2005

Walter Anderson last made headlines five years ago when he tried to arrange a rescue of the Mir space station. The headlines he's getting now are far worse. He was arrested Saturday at Dulles Airport on tax evasion charges that were publicly announced yesterday.

Mr. Anderson calls himself an "anarcho-capitalist," according to one website. What does that mean? One explanation says:

Anarcho Capitalists argue that private enterprise can provide law enforcement, and the market place can resolve disagreements about what the law is and what the law means

Apparently the Justice Department isn't ready to embrace this, as it has not outsourced Mr. Anderson's prosecution.

Mr. Anderson is said to have spent lavishly on jewelry, fine wine and fine art while evading taxes on $450 million in income, according to the indictment. The Justice Department says he reported less than $68,000 in income in 1998, but somehow missed another $126 million. Easy enough to miss that, for sure. With high living and allegations of cash flying across borders by the millions, this should be an interesting case. Mr. Anderson probably hopes that things go better for him here than they did for the Mir.

There's lots of mainstream coverage of this one, includint this from the New York Times: I.R.S. Accuses Man of Hiding $450 Million

Our prior coverage is here.

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EVADING TAXES ON $450 MILLION? THAT'S NOT A SMALL NUMBER. THAT'S A VERY BIG NUMBER.

February 28, 2005

The IRS may have landed a big one. The Department of Justice today announced the indictment of a Washington D.C. "telecommunications entrepreneur" Walter Anderson on charges of evading taxes on up to $450 million of income over five years. From the press release:

The indictment alleges that over a five-year period, Walter Anderson personally earned nearly a half billion dollars through investments in business ventures he conducted through offshore corporations he set up to make it appear that he was not personally earning these amounts.

The press release says the charges could merit an 80-year sentence.

The release reminds us that "Every defendant is presumed innocent until and unless found guilty."

Tax Analysts also has coverage.

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