Artful Dodgers: The Billionaires Who Cheated on Their Taxes

Forbes
Francesca Pascale
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Silvio Berlusconi y Francesca Pascale

Who's more powerful than a billionaire? The taxman, of course.

That almighty agent of the government added another scalp to his bag last week when Ty Warner, the Beanie Babies baron, plead guilty to tax evasion in a tearful moment inside a downtown Chicago courtroom. Warner, who hid as much as $107 million in an offshore account, agreed to pay $53 million in civil penalties. He now faces up to five years in jail, his sentencing expected to follow in January.

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To be sure, Warner certainly wasn’t the first billionaire in this type of situation.

Among the most infamous instances involved commodities investors Marc Rich and Pincus Green, who traded oil with Iran during the hostage crisis, fled to Europe in 1983 to escape U.S. tax charges and then decades later both received get-of-jail-free cards in the form of an eleventh-hour pardon from President Clinton. Russian-born Igor Olenicoff in 2007 copped to lying for years about accounts in the Bahamas, Switzerland and Britain. He later blamed the evasion on Swiss bank UBS, and then tried--and failed--to sue UBS. Now UBS is suing him.

And it is never possible to forget Leona Helmsley. The business titan and tyrant, nicknamed The Queen of Mean, was convicted in 1989, following a trial in which a former housekeeper quoted her as saying, "We don't pay taxes. Only the little people pay taxes."

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Perhaps. But Helmsley certainly immortalizes the proverbial bigger-they-are type of comeuppance.

Below find more on the crime and punishment of Helmsley and the rest—artful dodgers everyone one of them.

Ty Warner

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AP Photo

Source of wealth: Beanie Babies, real estate

Warner, whose Beanie Babies became a worldwide craze after their 1993 debut, hid as much as $107 million in an offshore account at a point in the 1990s or 2000s. The billionaire, who was ranked No. 209 among the 400 richest Americans with a net worth of $2.6 billion (most of his wealth is now in real estate, including the New York Four Seasons), plead guilty in October to tax evasion, agreeing to pay $53 million in civil penalties. He could face up to five years in prison. “When I signed those returns, I knew those moneys were missing," Warner said. "It was not accurate. I apologize for my conduct."

Marc Rich (Pictured) and Pincus Green

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AP Photo/Urs Flueeler

Source of wealth: commodities trading

Charged with tax evasion, mail and wire fraud, commodities traders marc Rich and Pincus Green fled to Europe in 1983. Pair fled to Europe, later pardoned by President Clinton. Rich was a NYU dropout who started in the mail room of Philipp Brothers. He met Green and together they built Phibro into the world’s largest trader of oil, grain and metals. Departing in the mid-1970s, they formed Marc Rich & Co., the forerunner of Glencore Xstrata. Green retired after heart surgery in 1992. Rich died in June.


Igor Olenicoff


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Source of wealth: Real estate

After an a 13-year IRS investigation, Olenicoff pled guilty in 2007 to a federal tax felony and paid back $52 million for deceiving Uncle Sam about overseas accounts. He had maintained for years that his Olean real estate empire was owned by foreign companies unconnected to him—then a single unmark box on a 2004 personal tax-return led to his arrest. Some of his actions seemed designed to dodge not only the IRS but also creditors: in 1992, he moved $60 million in corporate cash and disposed of U.S. assets in his name when a former business partner won a $3.3 million judgment against him. After his conviction, claimed UBS was to blame for his tax problems. His lawsuit against UBS failed, and UBS promptly failed one against him. He remains highly ranked among the world’s richest people, placing at No. 181 on the Forbes 400 with a $2.9 billion fortune.

Leona Helmsley

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Source of wealth: Real estate

Convicted of federal income tax evasion in 1989, Helmsley was sapped with an $8 million fine and served an 18-month prison sentence in a Connecticut federal prison. Her husband, the much older Harry Helmsley—the real estate tycoon who once controlled the Empire State Building—was found mentally unfit to stand try alongside her. He died in 1997. She died a decade later. True to her spiteful personality, two grandchildren received nothing from the real estate, though her beloved white Maltese, Trouble, received $12 million. The dog was later buried with Helmsley inside her mausoleum.

Mikhail Khodorkovksy (Pictured) and Platon Lebedev


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Source of wealth: Yukos Oil

Once the richest person in Russia, worth $15 billion and ranked no. 15 in the world, Khodorkovsky, the former head of Yukos Oil, and his business partner, Platon Lebedev, were arrested and convicted 2003 of fraud charges and tax evasion. They were supposed to be released in 2011 but instead were convicted a second time in December 2010 of embezzling more than 200 million tons of oil and laundering the proceeds; many suspect Prime Minister Vladimir Putin reportedly orchestrated the courts’ decisions to keep Khodorkovsky, a political rival, behind bars.

Silvio Berlusconi

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REUTERS/Tony Gentile

Source of wealth: Media

The former Italian prime minister finally received a guilty verdict on tax fraud in October 2012 after  facing dozens of court appearances over the decades. Prosecutors say he and several others bought the broadcast rights to thousands of American movies through offshore companies and then falsely declared the payment amounts to skirt taxes. He was also charged with having sex with a minor, an allegation he denies. Began his career as a cruise-ship entertainer. Business interests include stakes in Italy’s largest media company, financial services, publishing, movies and soccer team A.C. Milan.

[In Pictures: Billionaires Who Cheated On Their Taxes]

Domenico Dolce and Steffano Gabbana

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AFP/Getty Images

Source of wealth: Fashion

From catwalk to perp walk, an Italian judge in June hit the two fashion moguls with a 20-month prison sentence for tax evasion. (They vehemently deny it, and vow to continue to appeal.) Their Luxembourg-based holding company, Gado, allegedly hadn’t paid 40 million euros in taxes between 2003 and 2004. The court case has unraveled their business enough for the pair to put their IPO on hold.



Lee Kun-hee


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Pascal Le Segretain/Getty Images

South of wealth: Samsung Electronics

Lee, the richest man in South Korea with a $12.6 billion fortune and chairman of the country’s largest chaebol, was convicted of tax evasion in August 2009, though he had already paid back $130 million in overdue taxes more than a year earlier. His eventual presidential pardon in late 2009 drew criticism as another example of a tycoon getting off easy. He has since returned to his role as chairman of Samsung, one of the biggest electronics companies in the world.

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