Robert B. Anderson, a former Treasury secretary and Dwight D. Eisenhower's personal choice to succeed him as President, faces a possible 10 years in jail after pleading guilty Thursday to tax evasion and operating an unregistered offshore bank.
Anderson, 76, was accused by federal prosecutors of using several schemes to evade paying taxes on $127,500 in income in 1984 and of deceiving investors in an unregistered West Indies bank that lost at least $4 million of depositors' money.
Appearing before a federal judge to plead guilty to two felony counts, Anderson also admitted that he "encouraged" a woman friend to lie before a federal grand jury that was investigating his tax evasion.
"I regret the mistakes I have made," said Anderson, who appeared in frail health.
He told Judge Edmund L. Palmieri he had recently undergone two medical operations.
Raised in a strongly religious Texas farming family, Anderson was once described by Eisenhower as "the finest candidate we could have" for President in 1960, and preferable to either Richard M. Nixon or Henry Cabot Lodge. In July, 1959, Eisenhower gave up efforts to persuade Anderson to run and Anderson subsequently entered private business.
Anderson was considered the "strong man" in Eisenhower's Cabinet in the late 1950s, after the retirement of Secretary of State John Foster Dulles. He was Treasury secretary from 1957 through 1961, deputy Defense secretary in 1954 and 1955 and Navy secretary in 1953 and 1954.
"We were shocked to find that a former Treasury secretary had failed to file his income taxes," said U.S. Attorney Rudolph W. Giuliani, who said he will ask that Anderson serve a prison term. "This was not an isolated mistake . . . but a pattern of criminality."
Anderson, who now lives in New York City, also faces fines of up to $500,000 on the two counts. He told the court he has been working in the "investment business."
Anderson used several means of concealing his income, according to prosecutors. The Rev. Sun Myung Moon's Unification Church, which retained Anderson as a consultant and lobbyist, paid him by wiring money from an associated organization in Uruguay to Anderson's unregistered bank--the Commercial Exchange Bank and Trust, of Anguilla, West Indies, prosecutors alleged.
Anderson was principal agent for the bank in New York City, but never registered it with federal authorities.
The church also sent Anderson $80,000 in payments, disguised as a no-interest loan, via an offshore shell corporation created by Anderson, the government said. There was "no evidence" of wrongdoing by the Unification Church, Giuliani said.
In other cases, Anderson directed companies that owed him money for his services to send him checks to accounts opened by two Washington, D.C., women with whom he had "personal relationships," according to prosecutors.
The women withdrew the money and used it for their own purposes, they charged.
Prosecutors did not disclose the identities of the women, or provide other details of the relationships with Anderson.
Anderson and other principals in the Anguillan bank persuaded customers to entrust them their deposits, prosecutors said, by citing the secrecy they would enjoy and by mentioning in their promotional literature that by making such deposits they would have a chance to "execute transactions in a tax-free environment."
Impressed by Credentials
Such enticements enabled them to win the business of about two dozen depositors, including at least three whom Anderson personally recruited, according to Paul Summit, assistant U.S. attorney.
Authorities said at least some of the depositors gave their money to the bank innocently, because they were impressed with Anderson's credentials. But they said such banks are frequently used to conceal income, or to "launder" profits made in drug trafficking and other illegal activities.
Between 1983 and 1985, the bank principals invested at least $4 million of depositors' funds in fraudulent oil and gas projects, the government said. The money has since disappeared, prosecutors said.
Anderson's name also came up in a case brought by federal prosecutors against a former South African general, Abbott VanBacker, who was charged with illegally selling arms and munitions to Iran and other countries, according to Giuliani. He said federal wiretaps of VanBacker and associates found VanBacker repeatedly mentioning Anderson as providing advice to the group.
But investigators never uncovered evidence to suggest that any of his dealings with the group were unlawful, Giuliani said. Anderson has denied any involvement with VanBacker.
Once a wealthy man, Anderson's financial position has deteriorated in recent years, sources said. Giuliani predicted that reimbursement of bank depositors, and fines, will probably wipe out the remainder of his assets.