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Justice seeks $40 million restitution from tax cheat

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Telecommunications executive Walter C. Anderson, called the biggest tax cheat in U.S. history by the Justice Department, would have to pay the D.C. government more than $40 million in restitution under a recent request by federal prosecutors in preparation for his upcoming sentencing.

According to a government memo, the D.C. government could have hired hundreds of additional police officers and teachers if Anderson had not evaded paying his city and federal income taxes.

"These taxes are the same funds that are needed to pay for the District's schools, parks, roads programs and services," the Justice Department wrote in a memo, filed Friday, seeking a 10-year prison term for Anderson.

Anderson, 55, has pleaded guilty to charges that he evaded $178 million in federal taxes and $42 million in D.C. taxes while using offshore accounts, drop boxes and post office boxes to conceal his residency in the District.

He will be sentenced March 20.

In its sentencing memo, the Justice Department said Anderson's failure to pay taxes held serious consequences for city residents.

In 1999 alone, according to the memo, the $22.8 million that Anderson owed to the District could have paid for one or a combination of the following:

• The hiring of 430 police officers.

• The hiring of 700 new teachers.

• Health insurance, including immunizations and emergency services, for 14,000 uninsured children.

• Construction of six new senior wellness centers.

The government's memo states that Anderson should pay the District $42.9 million in restitution, adding "the citizens of the District of Columbia deserve no less."

A former MCI executive, Anderson used offshore bank accounts and corporations, including Gold & Appel Transfer in the Virgin Islands, to avoid paying taxes on $450 million he earned from 1995 to 1999, prosecutors said.

But restitution appears unlikely.

Anderson has said he doesn't have enough money to hire a lawyer. He is being represented by an assistant federal public defender, Michelle Peterson.

Miss Peterson said in a sentencing memo also filed Friday that there was no agreement in Anderson's plea deal concerning how much restitution, if any, he should pay to the federal and D.C. governments.

Calling Anderson "a private and unassuming man," Miss Peterson said her client has been punished more harshly than defendants convicted of similar crimes because of "abhorrent conditions" at the D.C. Jail.

She argued that most defendants charged in business crimes, such as former Enron executives Andrew Fastow, Jeffrey Skilling and Kenneth Lay, were released on bond pending trial. But Anderson has been held at the D.C. Jail, after a judge deemed him a flight risk.

"He is an entrepreneur who has made -- and lost -- millions of dollars over the course of his life," Miss Peterson wrote. "Nevertheless, he is a man who has lived a relatively modest lifestyle. This was not a crime of greed or avarice."

Miss Peterson also noted what she called Anderson's "exceptional charitable activities," including numerous space-related projects such as providing telescopes to children in Mexico, Chile, Iran and other countries.

While at the D.C. Jail, Anderson has sought to establish a library and arranged for legal assistance for inmates he thinks were wrongly accused, Miss Peterson said.

 

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