January 19 2010|09.16 AM UTC

Stan Reybern

The 12 Most Notorious Tax Evaders of All-Time

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Everyone is familiar with the saying “there are only two guarantees in life: death and taxes.” However, not all of us accept the latter as a given. As long as there have been taxes, there have been devious, far-fetched, and occasionally brilliant maneuvers to evade paying those taxes. The chosen maneuver varies, ranging from convoluted offshore accounts to filing false returns to brazenly hiding income. And while tax evasion is quite common (some experts speculate that US prisons would fill up if even one percent of deadbeats were prosecuted) some take their IRS dodging to truly newsworthy heights. Today, Billshrink looks back on the 12 most notorious tax evaders of all time – how much they earned, how they cheated, and what ultimately happened.

Walter Anderson

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Walter Anderson, a telecom entrepreneur, holds the dubious “honor” of being at the center of the largest tax evasion bust in U.S. history. Anderson “strung together an elaborate network of offshore companies and aliases to hide money”, according to Time Magazine’s account of the 2005 probe that revealed some $200 million in back taxes owed the Uncle Sam. After unpersuasively pleading that his tax dodge “was part of a legitimate and long-standing plan” to further such lofty goals as fighting against arms control and promoting human rights (according to the Washington Post), Anderson ultimately pleaded guilty and was ordered to pay nearly $400 million, not including penalties and fees. How Anderson thought a judge would believe he was hoarding hundreds of millions of dollars to selflessly donate to social causes (“sometime next year”, no less) is beyond us.

Sinbad

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As will be seen, some of the biggest tax evaders we know about are celebrities or public figures with the kind of incomes that trigger gigantic tax bills. Sinbad is one example, with tax professional Roni Deutch reporting that the famed comedian “filed federal income tax returns for years 1998 through 2006 but failed to pay the reported taxes.” All told, the former star is up against an $8.5 million tax bill, which has been delinquent for so long that “the U.S. Attorney General’s office wants his house sold to help satisfy the debt”, according to court documents pertinent to the case. It’s tough to imagine Sinbad’s financial picture being any bleaker than it is right now, as his 2009 bankruptcy filing cites between $10MM-$50MM in liabilities and less than $50,000 in assets with which to satisfy them.

Dionne Warwick

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Dionne Warwick evidently does not have nearly as many fans at the IRS as she does at her performances. The 69 year old pop singer and actress was named as being “among the worst tax debtors in California” by the California Franchise Tax Board, according to VOA News. The tax board concluded that the top 250 tax deadbeats collectively owed California over $249 million, of which Warwick personally owed $2.67 million. While she was apparently not prosecuted, the Tax Board did approve the establishment of a website that “names tax debtors as a form of public shaming”, and Warwick’s publicist has assured the media that she is diligently paying what she owes.

O.J. Simpson

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Ex-football star O.J. Simpson (right) will be forever linked to transgressions more serious than tax evasion, but he too was named by the California Franchise Tax Board alongside Warwick as a prolific tax dodger. All told, the disgraced athlete was accused of owing the state $1.44 million in unpaid taxes, which he cleverly attempted to avoid paying by moving to Florida (where state law prohibits creditors from seizing a debtor’s home) – after the debt was incurred. Of course, now that Simpson is doing time on robbery and kidnapping charges, it’s unlikely he’ll ever be punished separately for ripping off California’s taxpayers.

Marc Anthony

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Singing sensation Marc Anthony’s run-in with the IRS exemplifies the feeling among many of us that celebrities simply do not play by the same rules. After not paying his taxes from 2000 to 2004 (encompassing $2.5 million in taxes on $15.5 million in income), Anthony skated on the half-hearted explanation that “he’d hired a business management company to handle his taxes and was unaware he owed any money” according to Fox News. True, Anthony’s tax advisers were punished after pleading guilty to tax felonies, but Anthony himself “got off scott-free” simply by paying the debt after getting caught. Indeed, Anthony was evidently not even charged with a crime at all. How a world-famous entertainer pulling down more in a year that some Third World countries sincerely believed he owed no taxes was not addressed.

Leona Helmsley

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Best remembered for her famous remark “only the little people pay taxes”, the billionaire New York City hotel operator was busted in 1989 on “one count of conspiracy to defraud the United States, three counts of tax evasion, three counts of filing false personal tax returns, sixteen counts of assisting in the filing of false corporate and partnership tax returns, and ten counts of mail fraud”, according to Wikipedia. However, the “queen of mean” was no ordinary tax dodger. Her reign of illegality included defrauding and refusing to pay suppliers, creating phony invoices, and attempting to write off such distinctly non-business expenses as “a million-dollar dance floor, a silver clock and a mahogany card table.” Despite being sentenced to sixteen years in prison (and being ordered to report on tax day), Helmsley only served 19 months, and another two on house arrest. She was released in 1994 and remained in Connecticut until her death in 2007.

Richard Hatch

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First year Survivor winner Richard Hatch may have “outwitted, outlasted, and outplayed his fellow tribe members”, Fox News writes, but he failed to fool Uncle Sam. The winner of a $1 million prize for besting his competitors on the island reality TV show, Hatch was obligated, like everyone else, to report his income to the IRS. He didn’t, claiming instead that CBS had promised to take care of it. CBS, of course, reported that it no such arrangements had been made, and Hatch was subsequently handed a 51 month prison sentence in August 2006. Hatch got out in May 2009 on parole, but was quickly re-arrested for conducting TV interviews in violation of his parole. He was finally set free for good in October 2009, and will be under supervised release until 2013.

Willie Nelson

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If only every tax dodger had it as easy as Willie Nelson (called “the poster boy of tax evasion by CNN) did. After receiving a $16 million bill for back taxes in 1990, Willie didn’t call his lawyer. He didn’t hold a teary TV interview. And he certainly didn’t panic. Instead, he went into the studio and recorded The IRS Tapes: Who’ll Buy My Memories?, an album created and sold for no other purpose than paying off the embattled country singer’s tax debt. With most of the debt repaid by album sales, Willie went on the offensive, suing his accountant and settling for enough money to square away all his problems with the IRS within three years. Of course, it probably sped up Willie’s recording time to know that the feds were auctioning off his belongings while the album was in progress!

Pete Rose

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Like O.J. Simpson, Pete Rose will never be looked back on primarily as a tax dodger. Baseball’s all-time hits leader, shunned from the Hall of Fame for betting on games while managing the Cincinnati Reds, was stuck with a $1 million federal tax lien in 2004, according to The Smoking Gun‘s article “For Pete Rose, Tax Hits Keep on Coming.” It was more of the same for Rose, who had already “spent five months in federal prison in 1990 following a guilty plea to a felony tax evasion charge” stemming from his failure to file two tax returns. A scanned-in copy of the lien filed against Rose can be seen here. To date, Rose has yet to satisfy either his detractors at the IRS or within Major League Baseball.

Wesley Snipes

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Wesley Snipes was apparently not as swift at fighting off the feds as he was at slicing and dicing vampires in the Blade trilogy. And unlike Willie Nelson, Snipes wasn’t able to wriggle out of legal trouble by quickly cutting a movie to pay his debts. In 2008, the New York Times reported that the shamed actor had been handed “three years in prison for willfully failing to file tax returns” by a federal judge. The Times saw Snipes’ conviction as the biggest tax-related bust since Leone Helmsley was booked in 1989, citing Snipes’ eye-popping $17 million back taxes bill (not including interest and penalties.) While Snipes tried to buy his way out of trouble by offering a $5 million “down payment” on his debt prior to the conviction, both the judge and prosecutors refused to accept the checks. For what it’s worth, Snipes (through his attorney) has vowed to appeal his conviction.

Nicolas Cage

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A workhorse if nothing else, Hollywood icon Nicolas Cage incurred the wrath of the IRS for allegedly failing to report $24 million received for his participation in the 2007 films Ghostrider and Grindhouse, according to AccountingWeb. It all came to a head on July 14, 2009, when the feds “filed a tax lien against him in the Orleans District Court in Louisiana, for $6,257,005.” Cage responded by rushing to sell real estate in New Orleans and Hollywood to keep the IRS at bay, reportedly dropping the asking price on his California residence “from $35 million to a mere $17.5 million.” This was not the first time Cage got into tax trouble. Just a year ago, Cage came under fire for allegedly earning $18.5 million to star in National Treasure, but only reporting $17 million. Beyond that, Cage was also accused of “inappropriately writing off $3.3 million in personal expenses as business deductions”, including such questionably business-related items as “travel, gifts, limos and his Gulfstream 1159a Turbo Jet.”

Al Capone

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Finally, what list of notorious tax evaders would be complete without Al Capone? The legendary Chicago gangster was ultimately done in not by any of his high-profile crimes (allegedly rigging mayoral elections, gambling and prostitution, among others), but by simple tax evasion. Even once he was caught, Capone was reluctant to diminish the “buy ‘em off” mentality and tactics that had served him so well in organized crime. Reportedly, Capone attempted to bribe and intimidate potential jurors leading up to his trial, but this too was eventually discovered by Bureau of Prohibition agent Eliot Ness, who played a significant role in shutting down Capone’s breweries and speakeasies. By 1939, Capone had finished his 11 year prison sentence, but had greatly declined physically as his long-time affliction of syphilis worsened with age. In 1947, Capone succumbed to fatal cardiac arrest after years of deteriorated physical and mental health.

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{ 27 comments… read them below or add one }

Zahid Lilani January 19, 2010 at 10:43 am

I really like Nicolas Cage and feel very sorry for him. The way it works with IRS is once you are on hook, that’s pretty much end of you.

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JOhn Woods January 19, 2010 at 2:01 pm

Wow, Thats some pretty cool stuff dude. Nicholas Cage? I had no idea!

RT
http://www.online-anonymity.se.tc

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Danny January 19, 2010 at 2:02 pm

LOL @ Dionne Warwick

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Derek Jackson January 19, 2010 at 2:10 pm

Wrong Richard Hatch in the picture. You have the guy from the original Battlestar Galactica with the same name.

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GoatBoy January 19, 2010 at 2:13 pm

That’s Gladys Knight, not Dionne Warwick. Also HURRRR!

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Dave January 19, 2010 at 2:13 pm

Umm – you forgot Marc Rich.

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bopo January 19, 2010 at 2:14 pm

You’re using a picture of the wrong Richard Hatch. That’s the actor from Battlestar Galactica, not the tax cheat from Survivor.

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Prince January 19, 2010 at 2:19 pm

I believe that’s a pic of Gladys Knight… and NOT Dionne Warwick.

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Jimmy October 20, 2010 at 12:17 am

Maybe the person changed her picture. If not, that IS Dionne and not Gladys Knight. Maybe, it’s just a bad picture but it’s definitely her. I have read in many places that she owes a lot. I love her as a singer. She’s great. Maybe, she needs to sell some of her properties and other possesions.

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wrong richard January 19, 2010 at 2:22 pm

Wrong richard hatch in the photo, morons.

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They All Look Alike, Right? January 19, 2010 at 2:27 pm

Your picture of Dionne Warwick is actually Gladys Knight.

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what? January 19, 2010 at 2:39 pm

You got the wrong Richard Hatch there.

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Jimbo January 19, 2010 at 2:40 pm

That’s the wrong Richard Hatch dude…not Battlestar Galactica fans are you?

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Anonymous January 19, 2010 at 2:41 pm

That is not a picture of Dionne Warwick in your article about tax evasion, that is a picture of Gladys Knight.

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Anonymous January 19, 2010 at 2:46 pm

that is not dionne warwick
it is gladys knight

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Bob January 19, 2010 at 2:56 pm

That is a picture of Richard Hatch the actor (Battlestar Galactica) not Richard Hatch the Survivor contestant.

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John January 19, 2010 at 3:05 pm

Where do you get your pictures from? The picture you have attached to Dionne Warwick is NOT Dionne Warwick, but Gladys Knight. And the picture you have for Richard Hatch is not of him. Either person in the picture.

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brendoman January 19, 2010 at 3:06 pm

That picture of Richard Hatch is not the Richard Hatch from Survivor, it is Richard Hatch from Battlestar Galactica.

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Black person January 19, 2010 at 3:20 pm

The lady pictured as Dionne Warwick is actually Gladys Knight. All blk ppl do not look alike. Please correct.

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Jimmy October 20, 2010 at 12:20 am

No, you are wrong. That is definitely Dionne. It is NOT Glady’s Knight. You and others said that, but it is indeed Dionne.

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cs January 19, 2010 at 3:51 pm

Why is there a picture of Gladys Knight in write up about Dionne Warwick?

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notstupid January 19, 2010 at 6:42 pm

The fact that this person posted the wrong pictures is almost as dumb as the idiots who keep repeating this? Can you not read the comments above you? I’m simply amazed you parrots are still alive and able to type. So much for evolution.

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Terry January 20, 2010 at 6:53 am

Listen People, Those are pictures of The real Richard Hatch and Dione Warwick. If you don’t know what your talking about, then do not comment. Did you ever watch survivor, this is the gay dude who ran aroung naked all the time. He was not in Battlestar Galactia, different hatch. The picture if Dione may resemble Glayds Knight but it is indeed Dione Warwick. I think you all owe the editor of the peice an apology.

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Jimmy October 20, 2010 at 12:22 am

You are definitely correct. That is Dionne and it is Richard. Why did so many people think it wasn’t?

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Jimmy October 20, 2010 at 12:24 am

You are definitely right! Why did all these people think that wasn’t Dionne or Richard? I’m a big fan of Dionne’s and I’ve seen Richard Hatch in a movie. They must not be fans of Dionne. They need to do a google search or click on that source under Dionne’s picture.

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notstupider January 20, 2010 at 12:20 pm

@notstupid: I agree. Don’t peole read the comments first?!
Jeez.

Oh and BTW, the pics are wrong, all of them.

Great post though.

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Al Blanz January 26, 2010 at 4:42 am

You left out Timothy Geitner.

Obama’s Sec of Treasury, (thus head of IRS!!).

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