Largest fraud ever against the IRS – this businessman evaded $450 million in taxes despite declaring bankruptcy

Recently, the Internal Revenue Service (IRS) had to deal with the largest fraud in the country regarding a $450 million tax evasion case. In 2023, the IRS increased its efforts to find tax evaders using money from the 2022 Inflation Reduction Act. The organization announced that it had recovered $1.3 billion in unpaid taxes from rich Americans a year after it was founded.  Either they hadn’t filed a tax return, or they had underpaid the IRS. It is important to note that tax evaders may face criminal penalties from the IRS, depending on how they handled their audit.  Particularly those who openly attempt to do so to avoid paying taxes. 

The largest tax fraud ever faced by the IRS in the United States

A well-known American businessman in the fields of private space flight and telecommunications was Walter Anderson. His attempt to save the Russian Mir space station in 2000 may have garnered him the most public notice. Anderson’s $30 million contribution maintained the platform in orbit for an additional year, despite the US’s desire for Russia to deorbit it so that it could concentrate on constructing the International Space Station with NASA. Even though Anderson had grown up and lived in Washington, DC, he detested the city, according to a story in the New York Times at the time.

Instead of discussing his personal life, he focused on his career accomplishments. Anderson explained to the newspaper how he began working in the telecom industry in 1979 as one of MCI’s first 300 employees. Using the earnings from the sale of Mid Atlantic Telecom to Gold & Appel, a seed company, he established Mid Atlantic Telecom five years later, followed by Esprit Telecom Group ten years later, to gain a presence in the recently regulated European market.  When he sold Esprit Telecom, it brought in around $1 billion. He used the money from the transaction to fund his desire to leave this world and travel to space.  

Furthermore, he lost a significant amount of money—roughly $60 million, according to Space News—on MirCorp and his first attempt at commercial space travel, the Roton rocket. However, he persisted and, in 2002, informed the outlet that he hoped to turn a profit with his next initiative, Orbital Recovery, in contrast to his earlier endeavors, “which he admitted could be characterized more by their underlying idealism than hard-nosed business acumen.”  However, the Internal Revenue Service (IRS) didn’t knock on his door until that year. 

Given the IRS tax fraud, Anderson was sentenced to 9 years 

According to the New York Times, Anderson was arrested in March 2005 when he got off a plane from London at Dulles Airport outside of Washington. Federal authorities indicted him on 12 counts, the most serious criminal case of individual tax evasion at the time. Using a complex network of offshore companies and bank accounts, prosecutors charged Anderson with concealing $450 million in revenue from tax authorities. In the British Virgin Islands, Gold & Appel was one of them. They claimed that his federal and local income tax debt exceeded $210 million for the years 1995 through 1999 alone.

His total income in 1998 was only $67,939, and he only paid $494 in taxes.  The commissioner of the Internal Revenue Service, Mark W. Everson, claimed that Anderson earned at least $126 million that year but failed to disclose it. The truth is that Andersnon didn’t even bother to file a tax return for the 1987–1993 tax years, according to officials. Anderson spent two years in jail before he pleaded guilty to two counts of federal tax evasion and one count of defrauding the District of Columbia. He received a nine-year prison term and a $23 million reparation order, and spent the last few months of his confinement at his home in Virginia.