The $100 Million Cite-Check Mistake

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Those of you who think that only dorks do cite-checking are . . . well, you’re right, but unfortunately for you this is a dork-heavy profession.  It’s part of the job description.  Case in point: whoever forgot to double-check a federal plea agreement with Walter Anderson, leaving the wrong statute cited therein, has potentially cost the government somewhere between $100 million and $175 million in restitution of unpaid taxes.  Seems like a decent reason to proofread.

Anderson is a telecommunications entrepreneur who the government says also put those entrepreneurial skills to good use hiding income from the IRS.  (It’s a little humbling to note that this guy was able to hide almost half a billion dollars through a complicated setup of offshore corporations, and I’m still trying to figure out Schedule A.)  Anderson was prosecuted for tax evasion, sentenced to nine years in prison and ordered to repay $23 million to the District of Columbia.

But because the Justice Department listed the wrong statute in the plea documents, District Judge Paul Friedman said he could not order similar restitution to the federal government.  "I’ve come to the conclusion," he said Tuesday, "very reluctantly, that I have no authority to order restitution.  I hope the government will appeal me."

It probably will, although it seems to have its hands full these days.  A spokesperson did say that the U.S. Attorney’s office would bring civil charges against Anderson, using "ample civil remedies available to recoup the money which are, in some respects, more efficient and quicker," though presumably less efficient and slower in other respects.

During his sentencing hearing on Tuesday, Anderson "appeared humbled but not overly apologetic."  He "took responsibility for his actions but said he never intended to defraud the government" just because he didn’t file tax returns on more than $450 million in income over five tax years.  Anderson also said in his defense that the extra millions he kept weren’t funding an opulent lifestyle.  (Which strikes me as not a very good defense, but I’m not a tax attorney.)  "For every time I ate in a nice restaurant," he said, "I also grabbed a doughnut or a burger in an airport.  I could have wasted millions.  I could have taken a limo everywhere."  He even occasionally flew coach, for Christ’s sake.  What more can a man do?

Judge Frieman, unimpressed by Anderson’s "could have wasted millions" defense, sentenced him near the top end of the possible range.  With time served he will be out in less than six years.