Walter Anderson (entrepreneur)

Walter C. Anderson (also known as Walter Anderson Crump;[1] born 1953) is an American telephone entrepreneur who was arrested and convicted in the largest tax evasion case in United States history.[2]

Early life and career

Anderson grew up in Silver Spring, Maryland.[2] He later moved to Fairfax, Virginia, where he graduated from Woodson High School in 1971. He did not graduate from college, though he spent some time at a number of institutions, including the University of Richmond, Northern Virginia Community College, and George Mason University.[2]

Anderson began his telecommunications career as a salesman at MCI Communications in 1979. He entered into entrepreneurship in the 1980s and 1990s, during which he heavily invested in several telecom companies, which were later sold for large profits.[2] Anderson bankrolled many early private space ventures and paved the way for the "astropreneurs" who followed. His most high-profile space investment was MirCorp, the 1990s start-up that briefly privatised Russia's aging Mir space station. He reportedly pumped as much as $30 million into the venture. He also invested into Rotary Rocket.

Commercial space support and advocacy

In 1988, Anderson became an early backer of the International Space University (ISU) through Peter Diamandis. Anderson provided funding and advice to the founding team and in 1992 was awarded the distinction of ISU Associate Founder along with eleven other critical supporters.

ISU was founded in 1987 and held its first summer session program (SSP) in the summer of 1988 at the MIT campus in Cambridge, Massachusetts. The ISU operates a multicultural and multidisciplinary graduate space studies program. ISU has held SSPs annually in varying locations around the world since the inaugural 1988 session. In 1995 it began offering a Masters program from its permanent campus in Strasbourg, France. Anderson was a permanent member and served on its Board of Directors for its initial five years of operations.

Anderson has been a leader in promoting the commercial development of space. He believes that the development of space resources can help to resolve many of the challenges facing the entire planet. He was a major supporter of the Space Frontier Foundation from its founding in 1988. He also created and endowed the Foundation for the Nongovernmental Development of Space, which has provided funding for projects such as the "asteroid watch" and sponsored the CATS Prize (Cheap Access To Space).

MirCorp

Anderson had been an ardent supporter of the development of commercial space activities. He cofounded International Space University with Peter Diamandis, Todd Hawley and Bob Richards. The organization has a permanent campus at Strasbourg, France. The international Space University celebrated its 25th anniversary on October 23, 2012. Anderson provided significant funding to not-for-profit Space Frontier Foundation and served on their Board of Directors.

NASA actively resisted any cooperation with the Russian Space Agency and the Russian corporation, RSC Energia, which was the owner of the Mir space station. In 1999, the Russian government and RSC Energia were suffering severe financial difficulties. They could no longer support the Mir. Anderson negotiated a "lease" of the Mir station on behalf of MirCorp, a company which he founded, and began plans to commercial and renovate the Mir.

MirCorp signed up the first commercial space tourist to travel to the Mir station. MirCorp was preparing for a public offering which was supported by Barclays Capital. The funds from the offering would be used to refurbish and expand the Mir station for commercial operations which would include media, manufacturing, orbit servicing and science activities. MirCorp launched the first "private manned mission" in history to the Mir to evaluate its condition and do some minor upgrades.

The NASA administrator made a number of public comments related to MirCorp commercial activities. He claimed that MirCorp was utilizing resources which the Russian Space Agency and RSC Energia had committed to the International Space Station.

NASA and the United States government pressured the Russian Space Agency to de-orbit the Mir and used both political and financial pressure. NASA officials made calls to United States corporations involved in space activities to warn them not to partner with or invest in MirCorp if they ever wanted to get another contract. In April 2001, the Mir was de-orbited into the Pacific Ocean. MirCorp was only four months away from the planned date of their public offering at that time.The MirCorp story is profiled in the documentary film Orphans of Apollo. [3]

Federal tax convictions

The United States government conducted an extensive investigation into Mr. Anderson's business and personal activities.

Anderson was arrested on February 26, 2005, at Dulles International Airport as he was returning from London.[4][5] He was accused of hiding his wealth in off-shore companies in Panama and the British Virgin Islands in an attempt to avoid taxation on his income. The Federal District Court of the District of Columbia later determined that Anderson did not have substantial financial resources. The companies that Mr. Anderson managed reportedly earned nearly $500 million in revenue during a five-year period.[4]

Anderson was held in the Washington, D.C. jail for over 2 years. The prosecutors claimed he was a flight risk and asked the judge to hold him without bail. On September 8, 2006, Anderson pleaded guilty to two felony counts of evading federal income tax (for filing tax returns in which he failed to report over $126,303,951 of income for year 1998 and over $238,561,316 of income for year 1999) under 26 U.S.C. § 7201 and one felony count of defrauding the District of Columbia under section 3221(a) of title 22 of the District of Columbia Code.[6][7] As part of the plea agreement, Anderson admitted to hiding $365 million of income by using aliases, shell companies, offshore tax havens, and secret accounts. For the year 1998, the year for which Anderson admitted to having earned more than $126 million, he had claimed an income of $67,939 on his federal income tax return, for which he had paid only $495 in taxes.[5] Soon after he pleaded guilty, he was sent to a minimum security facility.

On June 15, 2007, federal district judge Paul L. Friedman ruled that Anderson would not have to pay $100 to $175 million of his restitution to the federal government due to a typographical error by the government in the plea agreement. In his ruling, Friedman stated that he did not have the authority to "read something into a contract that is not there or to interpret uncertain language in the government's favor". Anderson will still have to pay $23 million in restitution to the District of Columbia government, and the government may sue for the difference in civil court. [8]

According to a web site entitled "JusticeForWalt": "On June 12, 2009 the Tax Court issued an ORDER [sic] accepting the IRS decision to conceded [sic] all the tax and penalty issue for 1995, 1996 and 1997. The ORDER indicated that a judgment for those years would be entered in Walter Anderson's favor." [9]

On March 7, 2011, the U.S. Tax Court issued a decision ordering Walter Anderson to pay $141,497,773 in tax deficiencies and $105,984,341 in penalties for a total of $247,482,114 owed to the IRS. Additional interest on the $247,482,114 Anderson owes could amount to an estimated $248,962,929.[10]

On September 7, 2012, the United States Court of Appeals for the Third Circuit upheld the Tax Court's March 7, 2012 ruling against Walter Anderson "determining civil tax deficiencies and fraud penalties for tax years 1995 through 1999".[11] The Third Circuit held "that his arguments were without merit."[11]

CNBC television program "The American Tax Cheat," April 14, 2011, featured Walter Anderson speaking in an interview from federal prison.[12]

He was released on December 28, 2012.[13]

See also

References

  1. ↑ Billionaire tax dodger craved space haven The Sidney Morning Herald
  2. 1 2 3 4 Hilzenrath, David S., Carol D. Leonnig, and Yuki Noguchi. Tax Case Defendant Says Money Was to Do Good. The Washington Post. March 4, 2005.
  3. ↑ Foust, Jeff (July 20, 2008). "Preview: Orphans of Apollo". The Space Review. Retrieved 30 January 2013.
  4. 1 2 Williams, Pete.Entrepreneur accused of biggest-ever tax scam. MSNBC. March 3, 2005.
  5. 1 2 Weiss, Eric M. Telecom Mogul Guilty of Tax Scam. The Washington Post. September 9, 2006.
  6. ↑ See generally United States v. Anderson, case no. 1:05-cr-00066-PLF-1, United States District Court for the District of Columbia, on counts 5, 6, and 11 of the Superseding Indictment at docket entry 68.
  7. ↑ For more detail, see also United States v. Walter Anderson, 545 F.3d 1072 (D.C. Cir. 2008), at .
  8. ↑ Judge can't fix government's $100 million boo-boo. Associated Press. June 15, 2007.
  9. ↑ http://www.justiceforwalt.com/ JusticeForWalt website
  10. ↑ http://federaltaxcrimes.blogspot.com/2011/02/walter-anderson-fight-continues.html#more Federal Tax Crimes Blog
  11. 1 2 Kroh, Eric (September 2012). "THIRD CIRCUIT UPHOLDS TAX COURT DECISION AGAINST TAX EVADER WALTER ANDERSON. (Section 6663 -- Fraud Penalty) (Release Date: SEPTEMBER 07, 2012) (Doc 2012-18801)". Tax Analysts (2012 TNT 175-7).
  12. ↑ https://www.cnbc.com/id/42192642 CNBC TV "The American Tax Cheat"
  13. ↑ Inmate #27981-016, Federal Bureau of Prisons, U.S. Dep't of Justice, at .
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