Reclusive mogul on trial accused of being largest tax dodger in history

Walter Anderson has done many things in his rich, varied and indubitably eccentric life. He made a fortune in the telecommunications industry, dabbled in art collecting, and in 2000 invested $20m (£10.4m) in a project to sell trips in space on the ageing Russian Mir space station.

Walter Anderson has done many things in his rich, varied and indubitably eccentric life. He made a fortune in the telecommunications industry, dabbled in art collecting, and in 2000 invested $20m (£10.4m) in a project to sell trips in space on the ageing Russian Mir space station.

Now the reclusive multimillionaire could soon acquire a new and more dubious distinction, as the largest individual tax dodger in American history, accused of evading federal and local income taxes of $210m over just five years between 1995 and 1999.

Mr Anderson, 51, was arrested on Saturday as he arrived at Dulles airport in Washington on a plane from London. If convicted he faces up to 24 years in prison.

According to Mark Everson, a commissioner of the Internal Revenue Service,which has been tracking its quarry for many years, Mr Anderson "ended up in a class by himself" among tax evaders, and "ran the table on tax violations". Prosecutors say that in 1999 alone he made $126m but paid only $494 in taxes on declared income of $67,939.

In his first appearance in court this week, Mr Anderson denied all charges against him, while his attorney argued that the government's case was grossly exaggerated, and built on "innuendo and rumour". But Susan Menzer, the federal prosecutor said that he had "plenty of places to hide and plenty of money to spend". The judge agreed, remanding him in custody at least until a second hearing set for tomorrow.

Mr Anderson built a fortune during the 1980s and 1990s as an investor in the booming telecommunications industry of the period. Over the period, according to the indictment, he concealed some $450m of taxable income through offshore corporations.

Foremost among them was Gold & Appel Transfer, set up by Mr Anderson in 1992 in the British Virgin Islands, known to be a haven for tax evasion and international money laundering at the time. The territory tightened its procedures after the US clamped down on international terrorist financial networks in the wake of the terror attacks of 2001.

Prosecutors say that Mr Anderson also claimed at various times to be a resident of the Dominican Republic, though he lived in the Washington, DC area, and used private postal addresses in the Netherlands to hide his trail. They accuse him of setting up a network of offshore companies in Panama and elsewhere, under a variety of aliases including Mark Roth, William Prospero, and Ragnor Danksjold.

Mr Anderson is an elusive, figure who has repeatedly proclaimed his "hatred" for government. Prosecutors say that in Mr Anderson's apartment in Washington they found books including Poof! How to Disappear and Create a New Identity, and The ID Forger, Homemade Birth Certificates and Other Documents Explained.

Over the years, Mr Anderson's standard response to inquiries by officials is that people confuse his personal wealth with the value of Gold & Appel, a fund he manages. But prosecutors now claim that MR Anderson was the owner, rather than mere manager, of Gold & Appel.

Corporate tax avoidance is reckoned to cost the US up to $20bn a year.