Guilty plea in $200m tax fraud case

Walter Anderson, a US telecommunications businessman, on Friday pleaded guilty to evading over $100m in taxes in biggest criminal tax fraud in US history.

Mr Anderson was indicted last year on charges that he evaded over $200m in federal income taxes over five years, partly by hiding $450m in earnings at Barclays Bank in the Channel Islands and other offshore accounts.

Prosecutors alleged he concealed his identity as owner of two telecommunications companies in the 1990s through an elaborate web of private mail boxes, including one in the Netherlands.

A search of his home in Washington, DC revealed he had created seven aliases. Officials seized manuals showing how to disguise identities, including one entitled: “Poof! How to Disappear and Create a New Identity.”

Mr Anderson was also alleged in 1999 to have failed to report investment income of $238m from investments that he derived from two companies, Gold & Appel and Iceberg Transport.

The indictment said Mr Anderson, also a widely travelled art collector, failed to file tax forms on two paintings he bought – one a $1.2m Rene Magritte work bought at a Christie’s auction and a second painting by Salvador Dali.

Appearing in an orange jumpsuit at a court in Washington, Mr Anderson admitted his guilt in a plea arrangement with government prosecutors on two counts of tax evasion and a third count of fraud.

Government prosecutors agreed to cap any sentence to 10 years. At the time of his indictment, Mr Anderson was reported to have been eligible for up to 80 years in jail.

In exchange, Mr Anderson agreed that prosecutors had enough evidence to prove that he evaded taxes worth over $100m.

While accepting the thrust of the prosecution’s case in the counts where he pleaded guilty, Mr Anderson told the court through his defence counsel, Michelle Peterson, that he disputed some of the allegations.

He said he had always intended to use some of the funds he had amassed for charitable purposes and to fund “privatisation of space travel and exploration”.

Ms Peterson sought to persuade judge Paul Friedman that there was no longer any risk that Mr Anderson would flee the country to escape sentencing.

She argued that the last year a half he had spent in jail had resulted in him being “broken down in the most unbelievably harsh conditions”.

She told the judge he needed time to complete community service, get his personal affairs in order and spend time with his parents. “I know his mother is anxious for him to clear out their garage,” she said.

Mr Friedman declined to release Mr Anderson, who continues to be held without bail. Sentencing is expected in January.

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