Tax Evasion

WITH ALL the hand-wringing about the cesspool that is Wall Street, a new arrival to the planet might assume that large-scale corporate corruption is something new. But not only are institutional fraud and wanton lawlessness as old as civilization, a case can be made that they are as American as apple pie. Today's "upperworld" villains are likely good students of history and, as such, must feel assured that their odds of going to the slammer are about...

A Baltimore man admitted yesterday that he tried to avoid paying $2.9 million in taxes on his mother's estate by moving millions of dollars to a Swiss bank account and then abruptly moving to the Bahamas. Eric H. Heydemann, 41, pleaded guilty in U.S. District Court in Baltimore to one count of tax evasion. Heydemann, who will be sentenced July 30, could receive up to five years in prison and be ordered to pay back taxes, with interest and penalties. Heydemann's mother, Maija Heydemann, had operated the Baltimore Instrument Co. before she died in Australia in March 1996.

AUSTIN, Texas - In response to President Bush's call to all Americans to give service to our country, some are enlisting in the Peace Corps, AmeriCorps, Senior Corps or the armed services. Others have begun putting in their suggested 4,000 hours at a variety of charitable endeavors, through everything from the volunteer fire department to mentoring programs. And still other Americans are moving their companies to Bermuda and the Cayman Islands to avoid paying taxes. Isn't that special? The New York Times reports a "megatrend" among American companies to incorporate in Bermuda in order to sharply reduce their taxes.

A Maryland assistant attorney general has been disbarred for tax evasion. The state Attorney Grievance Commission could have suspended Anthony K. Waters but determined his case was so egregious that the only recourse was for his name to "be stricken from the rolls of those authorized to practice law in this State," according to the final order. Waters, who said he had no comment when reached by phone yesterday, had failed to file state income tax returns between 1990 and 1996, and failed to file federal income and withholding tax returns between 1990 and 1997.

THE BUSH TAX cut for the top 1 percent of richest Americans is worth $69 billion, nearly 38 percent of the total. People who protested that are virtually ignoring another Republican policy that "saves" the rich the same amount. Experts estimate that $70 billion in taxes are lost annually because many wealthy Americans hide money in tax havens, but Republicans in Congress and the White House are blocking efforts to stop this tax evasion. In some 60 "offshore" jurisdictions - places such as the Cayman Islands, Liechtenstein, and Jersey - bank account owners are not identified and often use shell companies to hide their ownership.

John Luther Katsafanas is a garrulous guy always working an angle, whether in his office, on the phone, or on the air during his weekly WCBM radio show offering financial tips to prospective Baltimore homebuyers. Take two conversations with him this week, for starters. Katsafanas was trying to talk The Sun out of writing about his being sentenced Friday by a federal judge to serve 12 months and a day after pleading guilty to two counts of tax evasion. He had, according to sentencing papers, failed to file any tax returns for the years 1977 through 1991.

WASHINGTON - The Supreme Court nullified yesterday a tax-evasion case against Webster L. Hubbell, a longtime confidant of President Clinton's, because prosecutors had built the case out of evidence Hubbell was forced to supply after being granted immunity from prosecution. In an 8-1 decision, the court ruled that former independent counsel Kenneth W. Starr could not have made a case against Hubbell without first granting him immunity, issuing a subpoena for his personal papers and forcing him to validate what he had turned over.

Joseph Jerome Hardesty, who built a thriving Annapolis restaurant business, acknowledged yesterday that for years he skimmed cash from his ventures, eventually pocketing more than $2 million that was never reported to the federal government. Hardesty, 58, pleaded guilty in U.S. District Court in Baltimore to one count of tax evasion for underreporting his 1997 income by nearly $400,000. Federal investigators said that since 1992, Hardesty had hid $2.06 million from the government by ordering his staff to delete receipts from the computerized bookkeeping system, then locking the extra cash in an office filing cabinet.

Warned last fall that it was likely he would be charged with federal tax evasion, Thomas A. Korjack didn't hang around to see what would happen, investigators said yesterday. A nuclear physicist at Aberdeen Proving Ground, Korjack, 49, took out a $280,000 mortgage on his Churchville home, liquidated his investments and started missing work for days at a time, according to a federal affidavit. A week ago, Internal Revenue Service detectives caught Korjack in Wyoming, where he was living under an assumed name.

The owner of two popular Annapolis City Dock restaurants, accused of cheating the IRS of about $109,000 in taxes by underreporting his income in 1997, was charged yesterday with tax evasion. Joseph Jerome Hardesty, 58, who also runs the annual Annapolis and Ocean City wine festivals, told the IRS that his taxable income in 1997 was $175,000 -- but he had earned $567,000, according to prosecutors in U.S. District Court in Baltimore. Hardesty owns Middleton Tavern and Fran O'Brien's Oyster Bar and Restaurant, both of which were raided by Internal Revenue Service agents in February 1999.