History’s Biggest Tax Cheats
These tax cheats paid a major price for their crimes.
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There’s an old saying that the only two things you can’t avoid are death and taxes, but whoever said that clearly hasn’t been to the Grand Caymans. The reality is that, throughout history, people have found ways — legal and otherwise — to duck taxes.
Whether they hid assets in offshore bank accounts or organized an armed rebellion, some of history’s biggest tax cheats are an eclectic bunch and a reminder that one person’s tax cheat can just as easily be someone else’s revolutionary hero.
Click through to find out more about how people have avoided paying taxes over the years.
Nigerian Scammers
Michael Oluwasegun Kazeem came to America on a student visa, but he would ultimately be a key figure in a criminal conspiracy that used personal information on over 250,000 people to obtain the electronic-filing personal identification numbers for almost 20,000 American taxpayers. The scammers used those PINs to file over 10,000 tax returns and claim over $90 million in stolen tax refunds.
The actual losses for the IRS totaled $11 million, but Kazeem was caught, and in November 2017 he was sentenced on conspiracy to commit mail fraud, aggravated identity theft and mail fraud charges.
Rich People Everywhere
Rich people pay the most taxes, both as a percentage of their income and in terms of the total amount they’re forking over. That said, the wealthy have an elaborate system for avoiding those taxes.
That system came to light in 2016, when an anonymous whistleblower handed over a cache of some 11.5 million records — the largest leak ever — revealing methods the rich were using to hide their money from tax collectors the world over.
Known now as the Panama Papers, the network of offshore holding companies and foreign banks used to conceal riches, even included world leaders like Vladimir Putin, Xi Jinping and David Cameron.
13th-Century English Nobles
The Magna Carta of 1215 is one of the most important legal documents in history, and it stemmed directly from people not wanting to pay taxes. In the early 1200s, King John of England was subjecting his barons to a series of expensive taxes to fund his wars to reclaim land in France.
This ultimately led to a group of rebel barons forcing King John of England to sign the Magna Carta — Latin for “The Great Charter” — that prevented the king from collecting taxes beyond his normal feudal levies without the consent of the royal counsel, which evolved into what we now know as a parliament.
Corporate America
Until the 2017 tax bill, the United States had the highest corporate tax rate in the developed world — 35 percent. Of course, a lot of corporations were finding ways not to pay it.
Corporations have a range of accounting tricks and methods that have allowed them to avoid paying taxes, one of the most popular of which is to simply move to Ireland. Tax inversion is the process by which an American company moves the legal address of its headquarters outside the United States for the sole purpose of avoiding taxes. Fifty major companies have done so since 1982, including 20 since 2012.
The most popular landing spot is Ireland, but there are plenty of options throughout Europe and the Caribbean.
Walter Anderson
No one person has managed to cheat their way out of as much tax debt as telecom mogul Walter Anderson. Anderson was sentenced to nine years in prison for skipping out on some $200 million in taxes through an intricate network of offshore companies, aliases and cash drops. Anderson ultimately hid $365 million in income.
In 1998, a year that he admitted to making $126 million, he reported an income of $67,939 and only paid $495 in taxes.
Al Capone
Al Capone murdered, stole, bribed and bootlegged, but as far as the federal government was concerned, failing to pay taxes really made Capone a criminal. The thing is, the IRS has a massive Catch-22 up its sleeve — just because your income is illegal doesn’t mean you don’t owe taxes on it. After over a decade of terrorizing the city of Chicago, Capone was convicted of tax evasion and sentenced to 11 years in prison.
Spiro Agnew
Spiro Agnew is neither the largest tax cheat in history nor the most egregious. What lands him on this list is the consequences of his fraud: Agnew was forced out of the vice presidency less than a year before President Nixon resigned from office. That’s right — had Agnew just paid his tax bill, he might have been our 38th president, or not.
Agnew is actually another victim of the Capone Conundrum in that he didn’t report the income he received from bribes — the last of which actually came in the form of envelopes of cash delivered while he was serving in the White House. So it might be safe to assume he was on his way out with or without the tax evasion.
The Founding Fathers
It’s ironic that Capone ultimately was prosecuted for tax evasion because not paying taxes is precisely how the government prosecuting him got its start.
In the aftermath of the Seven Years’ War, Britain was interested in recouping some of the considerable expense of defending its North American colonies from the colonists who clearly were benefiting from that protection, but American colonists weren’t having it.
Moves like the Stamp Act and the Tea Act prompted the city of Boston to heave 342 chests of tea into the harbor and sparked a revolution that would ultimately cost Britain control of all 13 colonies.
Gandhi
Yes, Mahatma Gandhi is a tax cheat. Turns out, few things spark a revolution like taxes imposed by the British Empire.
British rule in India included a series of onerous tariffs on salt that were paired with laws prohibiting the domestic production or sale of the essential commodity. This is why Gandhi made the Salt Laws the focus of his 1930 Salt March, when he and his supporters trekked some 241 miles to the coastal city of Dandi to illegally collect salt. In doing so, they not only avoided paying taxes on their salt, they also kept up the political pressure that ultimately led to Indian independence in 1947.
Most of Greece
Greece’s enormous public debt finally became impossible for the rest of Europe to ignore in 2010, and the rest of the European Union began a series of bailouts costing hundreds of billions of euros. Greece got itself into hot water with excessive government spending coupled with the global financial crisis, but the fact that Greeks just don’t pay their taxes also made it very hard for the nation to close its deficits.
Between a shadow economy that makes up an estimated 20 to 30 percent of Greece’s GDP paired with old-fashioned fraud and lying, Greeks are ducking €11 to €16 billion in taxes a year.
Swiss Banks
In 2009, Swiss banks decided to end the distinction between outright criminal tax fraud and tax evasion, which they had no real issue with. Switzerland has a long history of looking the other way with regard to the sources of money it holds, making the country a popular destination for the global super rich’s hidden assets.
The change was precipitated by whistleblower Bradley Birkenfeld, who revealed how a number of wealthy clients at Swiss bank UBS were escaping taxes and some 14,000 Americans were taking advantage of an IRS tax amnesty program meant to sweep up assets previously hidden in Switzerland.
Up Next: Take Advantage of These Commonly Missed Tax Deductions
Disclaimer: Some photos are for illustrative purposes only.
About the Author
Joel Anderson
Joel Anderson is a business and finance writer with over a decade of experience writing about the wide world of finance. Based in Los Angeles, he specializes in writing about the financial markets, stocks, macroeconomic concepts and focuses on helping make complex financial concepts digestible for the retail investor.
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