In what the federal government is calling the largest personal income tax evasion case ever, a telecommunications entrepreneur pleaded guilty to two counts of federal tax evasion and one count of defrauding the District of Columbia.
Walter Anderson, 52, allegedly failed to report about $365 million of income on his 1998 and 1999 federal returns. He will be sentenced on Jan. 16, 2007, and faces up to a decade of imprisonment, in addition to paying restitution to the United States and the District of Columbia.
According to prosecutors, Anderson crafted an elaborate evasion scheme involving offshore corporations and bank accounts to avoid paying taxes on $450 million he earned from business ventures between 1995 and 1999 - structuring elaborate distributions of company stock conceal his ownership of companies and using a variety of offshore trusts and tax shelters.
In a flurry of transactions between October 1992 and July 1996, Anderson transferred his ownership interests in three telecommunications companies to other companies he was already a principal owner in . After these transactions were made, the value of each of these corporations dramatically increased. In the following years Anderson used the assets of the larger companies to invest in other business ventures that generated more than $450 million in earnings -- all the while conducting most of these transactions through bank accounts located in the Channel Islands, a tax haven.Anderson failed to disclose to his tax return preparers that he controlled Gold & Appel, Iceberg Transport and foreign bank accounts. As a result, Anderson's U.S. Individual Income Tax Returns for 1998 and 1999 omitted approximately $126 million and $239 million of additional income, respectively. He also filed a false Washington Income Tax Return for the tax year 1999 failing to report this income.
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