June 18, 2007
District Court Refuses to Correct Government's Botched Plea Agreement in Biggest Tax Fraud Case in History
The U.S. District Court for the District of Columbia on Friday refused to correct the Government's botched plea agreement with telecommunications mogul Walter Anderson, who pled guilty to hiding over $365 million in income and evading over $140 million in federal income taxes during the 1990s in the largest case of individual tax fraud in history. The Government's plea agreement failed to order Anderson to make restitution, and District Judge Paul Friedman rejected the government's request to "correct clear error" in the agreement:
By its citation to the incorrect statute, the government limited any authority the Court might otherwise have had to impose restitution. Because the Court is bound under 18 U.S.C. § 3663(a)(3) to order restitution only “to the extent agreed to” by the parties, its authority was limited to ordering restitution under a statute that does not authorize restitution. Because plea agreements are contracts, the Court cannot simply ignore the language of a plea agreement .... It is bound by the language of the agreement as drafted by the government and agreed to by the parties. ... The Court is not free to read something into a contract that is not there or to interpret uncertain language in the government’s favor.
- Opinion and Order, United States v. Anderson, No. 2005-0066 (D.D.C. 6/15/07)
- Memorandum Opinion and Order, United States v. Anderson, No. 2005-0066 (D.D.C. 6/15/07)
For press coverage, see AP: Judge Says $100 million "Typo" Can't Be Fixed, by Matt Apuzzo. For prior TaxProf Blog coverage, see:
- Anderson Pleads Guilty in Biggest Tax Evasion Case in History: $365 Million (9/8/06)
- Biggest Tax Cheat in History Sentenced to 9 Years in Prison, But IRS Won't Be Repaid Because of Botched Plea Agreement (3/28/07)
- Further Developments in Biggest Tax Fraud Case in History (3/29/07)
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I have strong and immediate inclinations in both directions.
One thought: plea bargains, drafted by the government, should be strictly construed against the drafter. This was not a favor by the defendant. If the government could screw up a contract but still get what they "obviously intended," all protection from the letter of the "contract" would be out the window.
Alternative thought: what a load of nonsense. Even though the statute should have been correctly cited, the defendant was on notice that the government expected restitution, and that was the nature of the agreement.
Do both sides assume the risk that if they do not re-check their citations, then mistaken references will be taken as written, not as intended or agreed? That makes a mockery out of contract theory.
But then, so does treating a plea "bargain" as a contract. Coercion much?
Posted by: Eh Nonymous | Jun 19, 2007 7:28:15 AM