TELECOM Digest OnLine - Sorted: Telecom Founder Pleads Guilty to Tax Evasion/Fraud

Telecom Founder Pleads Guilty to Tax Evasion/Fraud

Matt Apuzzo (
Fri, 08 Sep 2006 15:02:35 -0500

by MATT APUZZO Associated Press

WASHINGTON - Telecommunications entrepreneur Walter Anderson pleaded
guilty to tax evasion and fraud Friday in connection with what
authorities said was the nation's largest ever criminal tax case.

Anderson was indicted in 2005 on charges he evaded $200 million in
federal and local taxes. Prosecutors said Anderson used offshore
corporations and bank accounts to hide income from tax collectors.

He pleaded guilty to two counts of tax evasion and one count of fraud
Friday. He admitted hiding hundreds of millions of dollars in income
from the IRS and Washington D.C. tax collectors during 1998 and 1999.

Under a plea deal with prosecutors, he faces up to 10 years in prison.

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, Anderson
formed corporations in the British Virgin Islands to hide the income,
prosecutors said.

Authorities said Anderson used other offshore corporations to disguise
his ownership in other telecommunications companies that earned more
than $450 million between 1995 and 1999.

Anderson, who allegedly didn't file federal income tax returns from
1987 to 1993, has been held without bail since his arrest. Prosecutors
say he owes $170 million in federal taxes and $40 million in
Washington income taxes.

In court documents, the government said Anderson could be linked to at
least seven aliases and that officials seized from his apartment
forged identification and manuals detailing ways to create fake
identification and hide from authorities.

Among them were "Poof! How to Disappear and Create a New Identity" and
"The ID Forger: Homemade Birth Certificates and Other Documents
Explained," the documents said.

Among the taxes allegedly owed to Washington are use taxes, equivalent
to sales taxes, on art, jewelry and wine. The indictment alleges that
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, then had them shipped to a Virginia address to avoid Washington

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