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United States v. Anderson

March 16, 2005

UNITED STATES OF AMERICA,
v.
WALTER ANDERSON, DEFENDANT.



The opinion of the court was delivered by: Paul L. Friedman United States District Judge

OPINION AND ORDER

This case is before the Court on defendant Walter Anderson's Motion to Impose Conditions of Release, filed on March 10, 2005. The issue of Mr. Anderson's pretrial detention was first considered by Magistrate Judge Alan Kay, who received briefing from the parties and heard testimony on February 28 and March 3, 2005. Upon consideration of the parties' arguments and the facts before him, and in accordance with the Bail Reform Act of 1984, 18 U.S.C. §§ 3141 et seq., Magistrate Judge Kay concluded that the defendant posed a substantial risk of flight and found by a preponderance of the evidence "that there exist no conditions nor combination of conditions which would assure the return of this Defendant to all future court appearances," and granted the government's motion to detain Mr. Anderson pending trial. See Detention Memorandum at 6 (Mar. 7, 2005). Defendant subsequently filed the instant motion, and the Court heard the proffers and arguments of counsel on March 11, 2005.

The Court's review of the magistrate judge's decision is de novo; the Court is free to use in its analysis any evidence, proffers or rationale relied on by the magistrate judge, but may hear additional evidence or proffers and employ its own analysis. United States v. Karni, 298 F. Supp.2d 129, 130 (D.D.C. 2004) (citing United States v. Hudspeth, 143 F. Supp. 2d 32, 35-36 (D.D.C. 2001)). Upon careful consideration of the indictment returned by the grand jury, the briefs and other papers submitted by the parties, the proceedings before Magistrate Judge Kay, Judge Kay's findings of fact and conclusions of law, and the evidence and proffers before this Court, the Court finds by a preponderance of the evidence that no condition or combination of conditions will reasonably assure the appearance of the defendant as required for trial. Accordingly, the Court will deny Mr. Anderson's motion to impose conditions of release and will order him detained pending trial.

I. THE BAIL REFORM ACT

Our system of criminal justice embraces a strong presumption against detention. "'In our society liberty is the norm, and detention prior to trial or without trial is the carefully limited exception.'" United States v. Gloster, 969 F. Supp. 92, 96-97 (D.D.C. 1997) (quoting United States v. Salerno, 481 U.S. 739, 755 (1987)). The Bail Reform Act of 1984, 18 U.S.C. §§ 3141 et seq., sets forth the limited circumstances in which a defendant may be so detained despite the presumption in favor of liberty. The Act provides, in pertinent part, that if a judicial officer finds by clear and convincing evidence that "no condition or combination of conditions will reasonably assure... the safety of any other person and the community, such judicial officer shall order the detention of the [defendant] before trial." 18 U.S.C. § 3142(e). The Act also provides for pretrial detention on the ground that no condition or combination of conditions will reasonably assure the appearance of the defendant as required. 18 U.S.C. § 3142(e). Where the government seeks pretrial detention on this basis, it has the burden of establishing by a preponderance of the evidence that the defendant is likely to flee before trial if released. United States v. Simpkins, 826 F.2d 94, 96 (D.C. Cir. 1987) (citing United States v. Vortis, 785 F.2d 327, 328-29 (D.C. Cir.), cert. denied, 479 U.S. 841 (1986)); United States v. Westbrook, 780 F.2d 1185, 1188-89 (5th Cir. 1986). In a pretrial detention hearing conducted under the Bail Reform Act, both the government and the defendant may present evidence by way of proffer, rather than by presenting live testimony. United States v. Smith, 79 F.3d 1208, 1210 (D.C. Cir. 1996); United States v. Karni, 298 F. Supp.2d at 131.

Although in its initial motion for pretrial detention the government advanced the argument that Mr. Anderson would pose a risk to the community unless detained, Magistrate Judge Kay rejected that argument, and the government has not pursued it in proceedings before this Court.*fn1 Consequently, the Court's inquiry will focus on whether the government has shown by a preponderance of the evidence that there are no conditions of release that reasonably will assure defendant's appearance. In making this decision, the Court is to consider the available information concerning (1) the nature and circumstances of the offense charged; (2) the weight of the evidence against the defendant; (3) the defendant's history and characteristics; and (4) the nature and seriousness of the danger to any person or to the community that would be posed by the defendant's release. See 18 U.S.C. § 3142(g).

The most salient of these factors in Mr. Anderson's case are the nature and circumstances of the offense charged, and the defendant's history and characteristics. Magistrate Judge Kay focused on two these factors in considering Mr. Anderson's detention, and the Court finds it appropriate to do so as well.

II. DISCUSSION

1. Nature and Circumstances of Charged Offense

Walter Anderson is a telecommunications executive and investment fund manager who enjoyed a great deal of success with investments in the telecommunications industry during the 1980s and 1990s. He has no history of violent criminal activity and, so far as the Court knows, no prior involvement in the criminal justice system beyond a conviction on misdemeanor drug possession charges in the District of Columbia Superior Court in 2004. The grand jury's 12-count indictment accuses Mr. Anderson of executing a sophisticated scheme to avoid payment of federal taxes on nearly half a billion dollars of investment income earned over a five-year period. The alleged scheme involved the formation of "shell" corporations in the British Virgin Islands and Panama, with the purpose of concealing from the United States government Mr. Anderson's ownership of investments in several telecommunications companies whose stock prices rose dramatically during the 1990s. The indictment alleges that as a result of these investment activities, Mr. Anderson owes approximately $210 million in back taxes to the federal and District of Columbia governments. The combined statutory maximum penalties for the federal crimes with which Mr. Anderson is charged is 23 years; he could face considerable additional time if convicted of the District of Columbia tax evasion charges. At 51 years old, Mr. Anderson potentially could spend most of the remainder of his life in prison if convicted.

Count One of the indictment charges Mr. Anderson with corruptly obstructing, impeding and impairing the due administration of the Internal Revenue Laws, in violation of 26 U.S.C. § 7212(a), inter alia, by first failing to file tax returns for seven successive years (1987 to 1993) and then filing false returns, by refusing to cooperate with the IRS in its efforts to collect taxes from him, by creating offshore corporations in tax haven countries in a manner that concealed his ownership of assets and obstructed efforts by the IRS to monitor his financial transactions, by filing false and fraudulent returns for certain years, by concealing information from his accountants concerning his control over certain foreign bank accounts (leading to the preparation and filing of false tax returns), and by making false and misleading misrepresentations to his accountants for purposes of misleading the IRS in connection with an IRS audit. Counts Three through Six of the indictment charge tax evasion, in violation of 26 U.S.C. § 7201, in connection with tax years 1996, 1997, 1998, and 1999. Counts Seven through Twelve charge fraud in the first degree, in violation of 22 D.C. Code § 3221(a), in connection with the same tax years and tax year 1995, and the District of Columbia use tax.

The return of the indictment was preceded by the execution of two search warrants at Mr. Anderson's home and office, on March 19, 2002 and November 7, 2003, during which were seized approximately 90 boxes worth of documents and other evidence. See Government's Motion at 9; Transcript of Return on Bench Warrant and Arraignment Before the Honorable Alan Kay, United States Magistrate Judge (Feb. 28, 2005) ("Feb. 28 Transcr.") at 15-16. The grand jury also obtained thousands of other documents by subpoena. See id. at 53. On the basis of this evidence, the grand jury found probable cause to believe that Mr. Anderson committed the charged offenses, which offenses, the government persuasively asserts, demonstrate substantial familiarity with the commercial and financial laws of other countries, sophistication in arranging international financial transactions and in moving money across borders, and a facility for concealing the existence and location of significant quantities of money and other assets. The behavior underlying these charged offenses clearly suggests that Mr. Anderson is a flight risk. See United States v. Townsend, 897 F.2d 989, 994 (9th Cir. 1990) (nature and circumstances of charged offense "weigh[ed] against bail" where accusations were "of sophisticated criminal conduct, whose successful completion required the ability to travel internationally, to adapt easily to foreign countries, and to move assets and individuals quickly from one country to another"). The gravity of the offenses and the potential prison term also create a considerable incentive for Mr. Anderson to avoid prosecution and the likelihood of imprisonment in the event of a conviction.

2. Defendant's History and Characteristics

Mr. Anderson himself demonstrates a number of characteristics that give the Court serious doubts about its ability to assure his appearance at trial through any combination of release conditions. Those most relevant to the Court are Mr. Anderson's unique ability to flee the jurisdiction and evade detection by the United States government by virtue of his substantial assets abroad, his connections overseas, and his use of aliases and false identities; strong circumstantial evidence of his clear interest in fleeing the jurisdiction and his intent to do so; his lack of ties to ...


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