The leaders of an international tax shelter scheme known as Anderson's Ark and Associates were sentenced yesterday to as much as 20 years in prison and ordered to pay more than $200 million in fines and restitution, the Justice Department said.
Keith E. Anderson, 62, of Hoodsport, Wash.; Wayne Anderson, 64, and Richard Marks, 60, both of California; and Karolyn Grosnickle, 62, formerly of Hoodsport, were convicted in December of multiple tax, fraud and conspiracy charges in what government officials called one of the most far-reaching tax schemes ever prosecuted.
Anderson's Ark, also known as AAA, operated out of headquarters in Hoodsport but touched five countries and had more than 1,500 clients, the government said. Clients paid AAA as much as $250,000 each to participate in a variety of schemes known as Look Back, Look Forward and Tax Magic in which, according to the government, clients' money was funneled through a shell company and banks in Costa Rica and Austria in ways designed to make payments look like deductible business expenses and income look like loans.
Money also was passed through banks in Montreal and Riga, Latvia, the government said.
Keith Anderson was sentenced to 20 years in prison and fined $63.5 million. The prison sentence was the longest ever for a tax-shelter promoter, Internal Revenue Service officials said.
At the sentencing in U.S. District Court in Seattle, Wayne Anderson and Marks each drew 15 years and $25,000 fines. Marks was ordered to pay $42 million in restitution, and Wayne Anderson was ordered to pay $63.5 million. Grosnickle was given eight years and ordered to pay $43.3 million in restitution.
"The activities Mr. Anderson and his co-conspirators were involved in were blatantly illegal, and they are being appropriately held accountable for these crimes," IRS Commissioner Mark W. Everson said in a statement. "People who are inclined to participate in schemes like those promoted by Mr. Anderson should know we are rebuilding our enforcement efforts, and we are increasingly likely to catch them."
The IRS and the Justice Department, which prosecutes criminal tax cases, have been stepping up efforts recently to crack down on tax shelter promoters and their clients.
"People who develop and use schemes to hide income and assets from the IRS should expect to spend a substantial amount of time in prison and also to pay civil penalties and interest in addition to any unpaid taxes," Assistant Attorney General Eileen J. O'Connor said.
Three other defendants associated with Anderson's Ark are awaiting sentencing.