Over the last six months, there have been several new legal developments in the case of space commercialization pioneer Walt Anderson, who is serving a 9-year sentence for tax fraud at a federal prison in New Jersey. The legal developments have renewed call from Anderson’s vocal supporters that the entrepreneur is innocent and should be released from prison.
Anderson’s MirCorp briefly leased the Russian space station Mir in 2000 – a commercial space venture chronicled in Michael Potter’s documentary, “Orphans of Apollo.” The effort briefly revived the dormant Soviet-era space laboratory before it was derailed by a combination of U.S. government pressure on the Russians to focus on ISS and Anderson’s financial losses in the dot.com collapse. The Russians de-orbited Mir in 2001.
Anderson was arrested in 2005 on charges of massive tax evasion and fraud. The following year, he signed a plea bargain in which he pleaded guilty to two felony counts of evading federal taxes and one felony count of defrauding the District of Columbia’s government. Since that time, Anderson has been fighting his conviction, claiming that he agreed to the plea bargain under duress and is not guilty of failing to pay his taxes.
The government’s efforts to recover taxes and fraud penalties from the former entrepreneur are continuing. In February, the court issued a summary judgment granting the government’s fraud case for the years 1998 and 1999 but found deficiencies in their case for the years 1995-97.
In a motion filed in June, the government agreed to concede penalties for 1995-97, saying that presenting the full case for all five years would require a lengthy and complicated discovery period and trail. The government said that recovering taxes and penalties for 1998-99 – which constitutes 80 percent of the total – would be sufficient, pointing out that the court had already ruled in its favor for those years.
Anderson’s supporters don’t buy that explanation. Tom Olson wrote on his publisher of the Justice for Walt website that he believes the IRS backed down after reviewing the evidence from the original case and determining that it couldn’t prove the case. Olson claims that 1995-97 are the crucial years for the government’s case; if it can’t prove fraud during that period, then there was no fraud.
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 acknowledge the new evidence of the IRS admissions and free him.
For now, Anderson remains in a South Jersey prison. Parabolic Arc will continue to follow the case and provide updates as new developments unfold.