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 the1980s 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 from1987 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 taxes.
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