Walter Anderson was the biggest convicted tax cheat in the history of United States. Some months ago he was pleaded guilty to two counts of federal tax evasion, and one count of defrauding the District of Columbia for failing to report about $365 million of personal income on his 1998 and 1999 federal returns.
Another $100 million he earned from other business projects during the 1990s. Anderson avoided paying taxes by using aliases, shell companies and offshore tax jurisdictions, one of them was British Virgin Islands. Walter Anderson started a long-distance telecommunications business in the 1980s. The prosecutors alleged him of registering corporations in BVI to hide the income, when his first company, Mid-Atlantic Telecom, merged with another company in 1992.
In the period of 1992-1996, through several transactions he transferred his ownership interests in three telecommunications companies to other companies, of which he was the main owner. After these transactions the value of each of those corporations increased very much.
After seven years of prosecutorial pursuit, Walter Anderson was sentenced to spend nine years in prison for failing to pay more than $200 million in taxes. He was also ordered to pay about $23 million to District of Columbia tax collectors, but a federal judge ruled that he won’t have to pay the Internal Revenue Service restitution ranging from $100 million to $175 million, because prosecutors listed the wrong statute in Anderson’s plea agreement.