After seven years of prosecutorial pursuit, telecommunications mogul Walter C. Anderson was sentenced to serve nine years in prison for failing to pay more than $200 million in taxes. He will receive credit for the two years he has already served.Anderson, 53, was also ordered to pay about $23 million to District of Columbia tax collectors, but a federal judge ruled that he won’t have to pay the Internal Revenue Service restitution ranging from $100 million to $175 million, because prosecutors listed the wrong statute in Anderson’s plea agreement. Judge Paul Friedman said he could have ordered Anderson to repay the money as part of his probation, but prosecutors has also omitted any discussion of probation from Anderson's paperwork.
The government has said that it plans to bring civil charges against Anderson to retrieve the restitution.
The biggest convicted tax cheat in U.S. history, last fall Anderson had pleaded guilty to two counts of federal tax evasion and one count of defrauding the District of Columbia for failing to report approximately $365 million of personal income on his 1998 and 1999 federal returns, as well as another $100 million he earned from other business ventures during the 1990s.
He avoided paying taxes by using aliases, shell companies, offshore tax havens and secret drop boxes abroad.
Anderson started a long-distance telecommunications business in the 1980s as the industry was being deregulated. When his first company, Mid-Atlantic Telecom, merged with another company in 1992, prosecutors said that Anderson formed corporations in the British Virgin Islands to hide the income. In a flurry of transactions between October 1992 and July 1996, Anderson transferred his ownership interests in three telecommunications companies to other companies that he was already a principal owner in. After these transactions were made, the value of each of those corporations dramatically increased.
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