Walt Anderson – Story of Criminal Tax Fraud - draft of slides

1

Walt Anderson Walt Anderson –– Story of Criminal Tax FraudStory of Criminal Tax Fraud

2


http://tangledskein200.wordpress.com

http://sites.google.com/site/tangledskein200/

…… 52 slides, enough for each week of the year.52 slides, enough for each week of the year.

3


4


5


6


7


8


SEC Filings, 1999SEC Filings, 1999

Where is Where is ““Smaller WorldSmaller World”” Trust in SEC Disclosure?Trust in SEC Disclosure?

9


February 2005 Arraignment Hearing: SwidlerFebruary 2005 Arraignment Hearing: Swidler

10


February 2005 Arraignment Hearing: SwidlerFebruary 2005 Arraignment Hearing: Swidler

11


12


13


14


15


16


17


18


No No ““ExonerationExoneration””

19


http://www.docstoc.com/docs/39680587/Taxhttp://www.docstoc.com/docs/39680587/Tax--CourtCourt--2036420364--0707--MayMay--1212--20102010--OrderOrderMoreover, Moreover, MrMr . Anderson. Anderson’’s opposition and crosss opposition and cross--motionmotionreveals a persistent fallacy . He states (at 1reveals a persistent fallacy . He states (at 1--2) :2) :--

I personal[ly] have been accused of fraud . * * *I personal[ly] have been accused of fraud . * * *Each day that goes by without a resolution is painful anEach day that goes by without a resolution is painful and difficult.d difficult.

--However, However, MrMr . Anderson not only was . Anderson not only was ““accusedaccused”” but also pleaded guilty to the but also pleaded guilty to the crime of tax evasion with respect to the years 1998 and 1999 . Tcrime of tax evasion with respect to the years 1998 and 1999 . The he ““resolutionresolution”” of this matter therefore already occurred in September 2006 of this matter therefore already occurred in September 2006 when the District Court accepted his plea and entered against hiwhen the District Court accepted his plea and entered against him a m a conviction of guilt . The Tax Court has no power to overturn a conviction of guilt . The Tax Court has no power to overturn a criminal criminal conviction, and we have already held (in our Memorandum Opinion conviction, and we have already held (in our Memorandum Opinion issued in issued in this case on February 24, 2009) that Mr. Andersonthis case on February 24, 2009) that Mr. Anderson’’s criminal conviction s criminal conviction collaterally estops him from disputing the IRScollaterally estops him from disputing the IRS’’s civil fraud determination for s civil fraud determination for those years . The partiesthose years . The parties’’ crossmotions for summary judgment on the crossmotions for summary judgment on the remaining issues in this case will not be an occasion to revisitremaining issues in this case will not be an occasion to revisit that issue . that issue . Though it may be painful and difficult, Though it may be painful and difficult, Mr. Anderson’s fraud is a settled matter for purposes of this tax deficiency suit.--U.S. Tax Court Order,U.S. Tax Court Order, SERVED May 13 2010SERVED May 13 2010--http://www.docstoc.com/docs/39680587/Taxhttp://www.docstoc.com/docs/39680587/Tax--CourtCourt--2036420364--0707--MayMay--1212--20102010--OrderOrder


20


21


http://tangledskein200.wordpress.comhttp://sites.google.com/site/tangledskein200/

22



23



24



25



26



Tax havens used by Walt Anderson and Gold & AppelTax havens used by Walt Anderson and Gold & Appel

27



28



29



http://sites.google.com/site/tangledskein200/redtulips

Red TulipRed TulipIn August 2000, Anderson and two of his companies borrowed $14.3 million from Donald Burns, his longtime friend, in connection with an unrelated investment. Subsequently, the loan agreement between Anderson and Burns was restructured on more than one occasion due to Anderson's inability to make timely payments. Accordingly, in separate agreements executed in March and November 2001, Anderson pledged Entree's majority ownership interest in Red Tulip as additional collateral for the loan.

30



31



32



33



JuniaJunia HissaHissa Neiva, Neiva, Donald BurnsDonald Burns, , Palm Beach Palm Beach Mortgage Mortgage Management, Red Management, Red Tulip, etc.Tulip, etc.

34



35


http://tangledskein200.wordpress.com http://sites.google.com/site/tangledskein200/

Tax fraudTax fraud avoids taking tax lossesavoids taking tax lossesand just evades all tax:and just evades all tax:

$272 million or more of eligible tax losses … but for complete tax evasion and fraud

36



37



38



…… had a passport from had a passport from British GuyanaBritish Guyana, according to , according to the indictment in the criminal case U.S. v. Andersonthe indictment in the criminal case U.S. v. Anderson

39



40



41



42



43




TAX COURT: WALTER ANDERSON HAS TO PAY UP.February 26, 2009http://http://www.rothcpa.com/archives/cat_walt.phpwww.rothcpa.com/archives/cat_walt.php

44



45


46


47



Red TulipRed Tulip

48



49



50

Walt Anderson Walt Anderson –– Story of Criminal Tax FraudStory of Criminal Tax Fraudhttp://tangledskein200.wordpress.com http://sites.google.com/site/tangledskein200/

In Anderson Case, Uneasy Role for Firms Corporate lawyers could face questions in tax fraud trialJason McLuremLegal Times May 31, 2005

http://www.law.com/jsp/article.jsp?id=1117184717977

A handful of law firms face being pulled into the largest tax fraud case in U.S. history. . . . he case, in the U.S. District Court for the District of Columbia, is focused on whether Anderson -- one of the highest-flying telecom entrepreneurs during the 1990s -- allegedly used an intricate series of transactions involving offshore companies to hide $450 million in assets from the tax collector. . . . Among those, Swidler had the longest relationship with Anderson. For more than a decade, it was Anderson's primary counsel on dozens of business matters involving regulatory, corporate, and litigation work. For a time, Anderson even lived in a building next door to the firm. . . . Swidler partners contacted for this article declined to comment, but a spokeswoman for the firm issued a statement saying: "Swidler Berlin was never engaged to provide Walter Anderson legal advice regarding any personal tax issue. We have been advised by the Department of Justice that it views Swidler Berlin attorneys only as witnesses in this investigation."

LONGTIME RELATIONSHIPThere is no evidence that Swidler attorneys are -- or could be -- the subject of any investigation, and prosecutors assert in court documents that Anderson lied to his "accountants and others." . . . Swidler provided corporate services for Gold & Appel early on. In 1993, according to a document obtained by The Washington Post, Swidler attorneys filed a letter with the Securities and Exchange Commission stating that "Anderson controls Gold & Appel and is the beneficial owner of substantially all of the equity of Gold & Appel." The letter, the Post says, states that the movement of assets to the offshore company was "for valid business purposes and not for tax avoidance purposes." . . . As Anderson grew wealthier by investing in a series of startup telecom companies, his relationship with Swidler grew. By the height of the telecom boom, say two former Swidler attorneys who spoke on condition of anonymity, Anderson was one of the largest clients of Swidler's80-attorney telecom group -- a practice with 300 to 400 clients, including companies such as WorldCom Inc. . . . Anderson's key relationship partners at Swidler, say lawyers who worked at the firm, were rainmaker Andrew Lipman, one of Washington's best-known telecom regulatory lawyers, and John Klusaritz, a tax specialist who once lectured at Harvard Law School's international business and tax program and who now chairs the firm's corporate practice.

According to SEC documents, work from Anderson and the companies he controlled went to other Swidler attorneys as well: Andrew Ray, Morris DeFeo, Sean McGuinness. And other Swidler attorneys helped Anderson and Gold & Appel buy and sell stakes in telecom companies and advised him and his companies in dealings with federal regulatory agencies. (DeFeo and McGuinness have since left the firm.) . . . Swidler lawyers also represented Anderson in disputes with other investors and the federal government. White-collar defense partners Warren Fitch, James Hamilton, and Michael Levy represented Anderson in the early phases of the criminal investigation into his personal taxes, and as late as last fall, litigators Michael Lichtenstein and Steven Tave (both of whom have left the firm) represented him before the 4th U.S. Circuit Court of Appeals in a civil suit brought by one of Anderson's business partners.... Lipman, McGuinness, Tave, and Levy declined to comment on questions regarding Anderson. Klusaritz, Ray, DeFeo, Hamilton, and Fitch did not return phone messages. ...In June 1997, court records show, Klusaritz filed a shareholder agreement with the SEC for Telco Communications, a Chantilly, Va.-based long-distance provider in which Gold & Appel, with Anderson as its signatory, owned a 25 percent stake. . . . Less than a week later, Telco announced its sale to a rival for $1.1 billion. Gold & Appel, the Anderson-controlled offshore company, ultimatelyreaped about $90 million in cash as well as several million shares in the newly combined company. . . . The indictment against Anderson charges him with failing to report more than $91 million in foreign earnings from Gold & Appel that year. An SEC filing a year before the sale states that Anderson "disclaims beneficial ownership" of Gold & Appel. . . .In 1999, a year in which the government says Anderson failed to report more than $230 million in earnings, Esprit was sold to a larger competitor. On paper, the deal meant a $190 million payday for Gold & Appel.

51


http://www.docstoc.com/docs/39680587/Taxhttp://www.docstoc.com/docs/39680587/Tax--CourtCourt--2036420364--0707--MayMay--1212--20102010--OrderOrderMoreover, Moreover, MrMr . Anderson. Anderson’’s opposition and crosss opposition and cross--motionmotionreveals a persistent fallacy . He states (at 1reveals a persistent fallacy . He states (at 1--2) :2) :--

I personal[ly] have been accused of fraud . * * *I personal[ly] have been accused of fraud . * * *Each day that goes by without a resolution is painful anEach day that goes by without a resolution is painful and difficult.d difficult.

--However, However, MrMr . Anderson not only was . Anderson not only was ““accusedaccused”” but also pleaded guilty to the but also pleaded guilty to the crime of tax evasion with respect to the years 1998 and 1999 . Tcrime of tax evasion with respect to the years 1998 and 1999 . The he ““resolutionresolution”” of this matter therefore already occurred in September 2006 of this matter therefore already occurred in September 2006 when the District Court accepted his plea and entered against hiwhen the District Court accepted his plea and entered against him a m a conviction of guilt . The Tax Court has no power to overturn a conviction of guilt . The Tax Court has no power to overturn a criminal criminal conviction, and we have already held (in our Memorandum Opinion conviction, and we have already held (in our Memorandum Opinion issued in issued in this case on February 24, 2009) that Mr. Andersonthis case on February 24, 2009) that Mr. Anderson’’s criminal conviction s criminal conviction collaterally estops him from disputing the IRScollaterally estops him from disputing the IRS’’s civil fraud determination for s civil fraud determination for those years . The partiesthose years . The parties’’ crossmotions for summary judgment on the crossmotions for summary judgment on the remaining issues in this case will not be an occasion to revisitremaining issues in this case will not be an occasion to revisit that issue . that issue . Though it may be painful and difficult, Though it may be painful and difficult, Mr. Anderson’s fraud is a settled matter for purposes of this tax deficiency suit.--U.S. Tax Court Order,U.S. Tax Court Order, SERVED May 13 2010SERVED May 13 2010--http://www.docstoc.com/docs/39680587/Taxhttp://www.docstoc.com/docs/39680587/Tax--CourtCourt--2036420364--0707--MayMay--1212--20102010--OrderOrder

52


Documents

Walt Anderson – Story of Criminal Tax Fraud - draft of slides