A Front-Runner for Tax Offender of the Year

We’re just six weeks away from the end of 2009, and it’s almost time for me to scour the news of the year to find the Tax Offender of the Year. It takes a lot to win this award; the tax offense must be on the Bozo side of things.

Well, a news story from Sausalito grabbed my attention this evening. Mark Anderson had a wine storage business called “Sausalito Cellars.” He offered his clients safekeeping for their wines. He utilized a warehouse on Mare Island, a former US Navy base. So far, so good.

But Mr. Anderson, a former city commissioner in Sausalito, wanted to live the good life. He allegedly embezzled some of the pricey bottles of wine he was supposedly safekeeping. Eventually, he was charged in early 2005 by the Marin County District Attorney of committing fraud and embezzlement; that case is still pending. He allegedly sold bottles of wine he was safekeeping to raise $800,000.

While that case was pending he was evicted from the warehouse on Mare Island. How could he get back at the warehouse? And how could he stave off an investigation into tax evasion? Hiring an attorney and working with the IRS is too mundane; instead, let’s burn down the warehouse (arson), and cover the tracks.

Yes, that’s exactly what he did. The fire, on October 12, 2005, destroyed an estimated $200 million worth of wine, put some wineries permanently out of business, and destroyed several collections of wine. And while some of the evidence of the alleged fraud might have been burned, plenty of evidence apparently existed for the arson and the tax evasion. Earlier today, Mr. Anderson pleaded guilty to 19 counts in federal court in Sacramento (including arson, tax evasion, and embezzlement). In return for the plea the US Attorney has agreed to a sentence of 15 years, 8 months. Mr. Anderson, who has already served three years, is unlikely to see anything but prison bars until he’s 70. He will also likely be ordered to make restitution of $200 million.

This is a crime that did nothing but destroy the livelihoods of others, and did nothing to divert suspicion from the original alleged crime of embezzlement. While Mr. Anderson’s attorney is hopeful that the District Attorney won’t prosecute him for embezzlement, it’s not clear whether he’ll be back in court in the future. Still, all the arson did was gain him time at ClubFed while still facing the original charges.


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