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Anderson was indicted in 2005 on charges he evaded $210 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 Internal Revenue Service and from Washington, D.C., tax collectors during 1998 and 1999. Under a plea deal with prosecutors, he faces up to 10 years in prison. Anderson had been charged with evading more than $200m in taxes over five years and faces up to 80 years in prison if found guilty. He was an art collector and was alleged to have hidden more than $450m in profits from federal and local authorities by creating an elaborate network of offshore investment companies, disguising his ownership of the two primary companies Gold & Appel and Iceberg Transport and concealing his US citizenship. It is alleged that Anderson set up accounts at Barclays Bank in Jersey, falsely stating that he was a citizen of the Dominican Republic and used private mailing addresses in the Netherlands to evade tax. According to the charges against Anderson, he transferred his holdings in three telecommunications companies Mid-Atlantic Telecom, Esprit Telecom and Telco Communications to G&A and Iceberg in the early 1990s. The authorities said that each investment became much more valuable in the following years, generating enough profit to enable Anderson to invest in other companies and make a $450m profit for G&A and Iceberg between 1995 and 1999. In 1998 Anderson, who lived in Washington D.C., reported a total income of $67,939 and paid a tax of just $494. Internal Revenue Service (IRS) Commissioner Everson said that Anderson actually made at least $126 million that year that he never reported. From 1987 through 1993, Anderson failed to file a tax return. Walt Anderson (52) who has been in prison since his arrest in March 2005, was CEO of Orbital Recovery Corp., and had played a major part of the competitive telecommunications industry which began in the U.S. in 1980 when MCI won a landmark legal decision which allowed it to compete with AT&T for long distance services. He successfully operated and sold many telecom operations and has been an investor, advisor, Chairman or board member for numerous other companies.
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