- The Washington Times - Monday, February 28, 2005

Telecommunications entrepreneur Walter Anderson has been arrested and charged with evading $200 million in federal and local taxes, the largest criminal tax case filed against an individual in U.S. history.

The indictment, announced yesterday, charges Mr. Anderson with hiding income from tax collectors through offshore corporations and bank accounts, and claiming to be a Florida resident to avoid paying income taxes in the District.

Mr. Anderson, 51, also is accused of purchasing fine art and wine and having it shipped to Virginia to avoid paying D.C. taxes, according to the indictment for fraud, tax evasion and obstructing the Internal Revenue Service (IRS).

He was arrested Saturday.

“He was living the high life,” IRS Commissioner Mark Everson said. “Because of his dishonest dealings, Mr. Anderson’s lavish lifestyle was subsidized by honest, hardworking Americans.”

If convicted, Mr. Anderson could face up to 80 years in prison. His attorney, John Moustakas of Goodwin Procter LLP, did not immediately return a call seeking comment.

Mr. Anderson started a long-distance telecommunications business at the time the industry was being deregulated.

When his first company merged with another company in 1992, he formed offshore corporations in the British Virgin Islands to hide the income and mask his involvement in the companies, the indictment says.

After additional mergers, Mr. Anderson tried to obscure his ownership further by creating another offshore corporation in Panama, under the alias Mark Roth, and using a mailbox in the Netherlands, according to the indictment.

Assistant Attorney General Eileen O’Connor said countries known as tax havens have been cooperating with U.S. investigations more often since the September 11 terrorist attacks.

The indictment says Mr. Anderson used the assets and profits of his telecommunications corporations to earn more than $450 million between 1995 and 1999 that he failed to report to the IRS.

Mr. Anderson also is accused of having failed to file federal income taxes each year from 1987 through 1993, and of owing the IRS hundreds of thousands of dollars in taxes, interest and penalties.

The indictment says that Mr. Anderson owes $170 million in federal taxes and $40 million in D.C. income taxes.

Among the taxes owed to the District are use taxes, equivalent to sales taxes, on art, jewelry and wine. The indictment says Mr. Anderson bought a painting by Salvador Dali and several paintings by Rene Magritte, an 18-karat gold bracelet and more than $47,000 in fine wines.

Under U.S. tax laws, citizens must report and file taxes on income earned worldwide. They also must disclose foreign financial accounts with a combined balance of more than $10,000.

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