A call for reason and fairness in the case of
U.S. vs. Walter Anderson

What's New

The most recent petitions and orders in the Tax Court have been added. Read the main article for information.

See a copy of the current Press Release.

Also see the Records section.

A statement from Walt was read at the screening of "Orphans of Apollo" at NASA/Ames, July 17, 2009.

A formal report, is available, both as web pages and downloadable originals, concerning Walt's conditions of incarceration, along with supporting Exhibits.

Update 7/30/09

Coming Soon

News as it occurs.

...So why is Walt Anderson still in prison?

Walter Anderson was coerced into pleading guilty to tax fraud, in the District Court of the District Of Columbia, United States. He was held for almost 2 1/2 years in the facilties of the Washington DC Corrections Department, prior to a trial, under life threatening conditions. He was routinely subjected to: sleep deprivation, sensory deprivation, denial of medical care, abuse and threats of abuse, extremes of heat and cold, and other tortures. The District Court "determined" that Walter Anderson was an "extreme flight risk", even though he had no prior criminal history and had a lifetime connection to the Washington DC area. Once he pled guilty however, he was apparently no longer a flight risk and was moved out of Washington DC to a minimum security facility with no walls or secured fences.

Shortly after his move, in September of 2007, he filed a petition in the United States Tax Court, contesting the tax and fraud claims against him. The tax case has proceeded much slower than other tax petitions which were filed at the same time. The Internal Revenue Service (IRS), the "respondent" in the Tax Court case, in their response to the petition, made claims that were identical to the claims which had been made by the prosecutors in the criminal proceeding agianst Mr. Anderson. Mr. Anderson, in his filings with the Tax Court, affirmed issues related to all the relevant claims and issues and provided substantial evidence to the Court to support his claims.

Respondent, IRS, filed a motion for "PARTIAL SUMMARY JUDGEMENT" claiming that the guilty plea in the prior criminal proceeding was all the proof needed by the Tax Court that Petitioner, Walter Anderson had commited Tax Fraud. The Tax Court denied the IRS claim for tax years 1995, 1996 and 1997, and granted their claim in part for tax years 1998 and 1999. the Tax Court determined, solely on the basis of the guilty plea in the prior proceeding, that some fraud had occurred, but did not determine how much tax liability would be subject to a "fraud penalty". The Court indicated that these determinations would be reserved for trial. (the IRS never submitted any evidence to the tax Court at any time during the proceedings relating to their tax and fraud claims)

Around March of 2009, the IRS obtained access to the documents and materials that prosecutors in the criminal case intended to use in the event of a trial in that prior proceeding. These documents and materials were the "best evidence" that the prosecutors had found to support their case. Petitioner, Walter Anderson, was also given access to the same document and materials per the discovery rules of the Court. On May 18, 2009, respondent, IRS, less than 2 months after they had obtained access to the documents and materials, sent a letter [link to May 18th 2009 letter] to petitioner in which they announced that they had "decided to concede all the tax and penalty issues" for tax years 1995, 1996 and 1997 . This unusual admission was in complete contradiction to the prior claims and positions of the IRS and United States prosecutors. Tax years 1995, 1996 and 1997, were the tax years that the Court had determined that IRS would have to prove all of their claims at trial. Respondent, IRS, after reviewing what must have been the most damaging evidence against petitioner, realized they could not prove their claims. This realization and exoneration, has come after Walter Anderson had already spent over 4 years in prison.

On June 2, 2009, repondent, IRS filed a MOTION TO SEVER with the Tax Court, in which he told the court of their intentions to concede all the tax and penalty issues for 1995, 1996 and 1997.

The IRS, in explanation of their decision to concede, advanced lame excuses about not wanting to have a "large discovery burden" as the reason for their unilateral admissions that ALL the facts, claims and issues of petitioner, Walter Anderson, were accurate and true. This is not a credible explanation. Discovery is routine in civil cases with the Tax Court and at the time of respondent's capitulation, no discovery burdens even existed for them. By doing this, the IRS gave up over $127 Million in potential claims, leaving only the claims for tax years 1998 and 1999.

On june 12, 2009 the Tax Court issued an ORDER accepting the IRS decision to conceded 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.

The IRS apparently believed that they would have an easier time winning their case for 1998 and 1999, since the Tax Court had already given them a partial win for those years. The Tax Court judge had already ruled that "some" fraud had occurred for those 2 years. Only the actual amount of any tax liability to be subject to a "fraud penalty" remained to be determined by the Tax Court at trial. The IRS hoped that it would take little effort to win these final years. The IRS wanted to win this case without ever having to actually prove any of their claims to the Court. The sole evidence that the IRS relied upon, to win the their case for the final 2 years, was the guilty plea in the prior criminal proceeding. This assured that the issues and claims against Walter Anderson would never be tried in the Tax Court. The District Court had held Walter Anderson until he "confessed", also without ever actually considering the government's claims at trial.

The strategy of the IRS may not work for them. The admissions that they made in favor of Walter Anderson, for tax years 1995, 1996 and 1997 are also applicable to tax years 1998 and 1999 under the legal priciple of "issue preclusion" also known as "collateral estoppel". This principle has been affirmed a number of times in Supreme Court opinions. If an issue has been "determined" in a prior case,then that issue is "precluded" from being relitigated in a second case between the same parties. The IRS admitted that in 1995, 1996 and 1997, that Walter Anderson had no tax liability on the income and earning of the not-for-profit charitable trust which he managed. When no tax is due then no fraud could have occurred. The source of this income tax liability was exactly the same in 1998 and 1999 as in the prior 3 years. The "issue" is legally identical.

Logically and practically the admissions of the IRS exonerate Walter Anderson of any fraud. Walter Anderson's filings in the Tax Court show that he has affirmed, in detail, the issues related to the IRS claims. The IRS decided to concede and admit ALL of claims that Walter Anderson made for 3 years. It is obvious that many of these admissions also are applicable to the final 2 years that were in dispute. If Mr. Anderson did not have any tax liability in 1997 on income from the charitable trust that he managed and no changes to the structure or ownership occurred in 1998. Then it is just not possible for there to be tax liability form the same source in 1998 and 1999. If there is no tax liabilty, then no fraud can possibly have occurred.

It is now clear, according to the IRS' own admissions, that Walter Anderson did not commit a tax fraud. However, no one in the United States Government is rushing to let him out of prison. The criminal Court still plans to try to impose hundreds of millions of dollars of restitution obligations on Walter Anderson, for funds that he never received or benefited from in any way. Now that it is clear that no fraud has occurred, this ongoing legal travesty is glaringly apparent. Walter Anderson's sentence is still in force, and will require a lot of efforts by his lawyers to "possibly" have the court acknowlege the new evidence of the IRS admissions and free him.

The injustice continues.

Walt is presently incarcerated at a minimum-security federal prison camp in Fairton, NJ. He can receive mail (see "Contact" page), but his phone time is limited to only 300 minutes per month. He can now also receive e-mail by way of a special program newly implemented for minimum-security inmates. If you are on Walt's approved visitors list, you will be able to send and receive text-only (no attachments) e-mails.

BACKGROUND

Walt Anderson was indicted for tax fraud by the U.S. Federal Government and arraigned on February 28, 2005. This was the result of an investigation which had been going on for six (6) years (since the summer of 1999).

Mr. Anderson’s legal counsel had been in touch with and cooperating with the government investigators and prosecuting attorneys since he learned about the investigation in March of 2002. In spite of an agreement between Anderson’s legal counsel and the prosecution to allow Mr. Anderson to self surrender after an indictment and to be released thereafter, the prosecution requested the court to hold Mr. Anderson. They claimed that he was intending to flee the country (even though he was arrested when returning to the US from a short trip to Europe).

Mr. Anderson has lived and worked in the Washington, DC area his entire life. It is very unusual for a person not having any criminal legal issues prior to the tax investigation to be held until trial. The prosecution made a large number of completely false and misleading claims to a US Magistrate and trial Judge to convince them to hold Mr. Anderson in prison prior to his trial.

Virtually all of the non-violent offenders are released prior to trial if they have some connection to the United States.

THE TAX CHARGES

Mr. Anderson founded and operated Mid Atlantic Telecom (based in Washington, DC) for ten (10) years. The company was sold to a large public company (Rochester Tel, later Frontier Communications) in 1993. Mr. Anderson arranged for a percentage of the proceeds of this sale to go to a charitable /not-for-profit organization which he created called Smaller World Trust. The Trust was set up outside the United States in the British Virgin Islands. This allowed the endowment of the Trust (provided by Anderson) to grow tax free.

The significant and material issue in the tax case against Anderson is if he is the owner of the assets in the Trust or is simply the founder and manager of these assets.

The US Government claims he should pay taxes on these assets which were held outside the United States. Anderson did not receive any portion of these assets and received only a small management fee (which he reported and paid taxes on) and the reimbursement of expenses for his activities related to the management of the Trust.

Gold & Appel Transfer S.A. (Gold & Appel) was one of the Trust assets. Gold & Appel was a venture capital/business development corporation which invested and managed the initial endowment for Anderson. This initial contribution of around 6 million US dollars grew rapidly.

SMALLER WORLD FOUNDATION

Smaller World Foundation (previously the Smaller World Trust) was formed as a not-for-profit charitable organization with certain specific purposes. It was formed and endowed by Walt Anderson in 1993. The bylaws of the organization designated that it would build assets for 13 years and begin some distributions in 2006.

Walt Anderson, the “grantor” of the original trust, has been an active participant in the management of the assets since the inception. Walt Anderson is specifically excluded from being a beneficiary of the Trust/Foundation by its bylaws/conditions.

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