Biggest Tax Cheat Ever Pleads Guilty

Sept. 8, 2006 — -- Telecommunications entrepreneur Walter Anderson pleaded guilty to tax evasion and fraud today in connection with what authorities said was the nation's largest-ever criminal tax case.

Under the plea deal with prosecutors, he faces up to 10 years in prison at his sentencing hearing in January.

Anderson was indicted in 2005 on charges that 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.

"Taxes build the bridges and pave the roads that deliver our supplies and transport our goods," Assistant Attorney General Eileen J. O'Connor said in a statement after Anderson's plea. "Yet some people who have benefited the most from taxes believe they are not obligated to pay them, and that they can avoid doing so by hiding their income and assets in offshore accounts. They are wrong on both counts."

In the courtroom today, Anderson's lawyer Michelle Peterson made a plea for Anderson to be released until the January sentencing, arguing that his 18-month stay in a Washington jail during the trial was more like six years, because her client sat in 120 degree temperatures and was denied treatment for his respiratory condition.

Peterson said Anderson needed the time out to "complete the community service, spend time with his parents -- his mother wants him to clean out the garage, and he has agreed to do that while he also cleans ups his current tax returns."

Judge Paul Friedman denied the requested bond time, saying Anderson is still a flight risk and could flee the country if released from jail at this time.

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.