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A mixed bag for ex-regulator

He’s cleared of extortion, found guilty of tax fraud

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Relieved that jurors acquitted him of extortion, former state regulator Larry Anderson headed to his home in Mesquite, Nev., Thursday feeling some apprehension.

"It's a mixed blessing," Jerry Mooney, Anderson's defense attorney, said of Wednesday's verdict. "We won on the most important charges, but at the end of the day, he still has tax-evasion charges to face."

Jurors found Anderson, the former director of the Utah Division of Radiation Control, guilty of tax evasion but cleared him of the more grievous charges of using his position to extort $600,000 worth of cash, gold coins and real estate from a business he regulated.

After six hours of deliberation, a 12-member jury announced the verdict in U.S. District Judge Tena Campbell's courtroom before Anderson and his family.

Anderson, 64, left quickly, refusing to talk about the verdict, but his family appeared upset.

Still, Mooney said he was "very happy" because the case was primarily about extortion and mail fraud. "There were always problems with the tax aspect."

"His credibility has been vindicated by the jury," Mooney said.

Jurors apparently were not convinced "beyond a reasonable doubt" that Anderson extorted hundreds of thousands of dollars from Envirocare owner Khosrow Semnani, despite allegations by Semnani and federal prosecutors.

"We are not critical of the jury's decision," Semnani's attorney Rod Snow said. "We're simply glad to have this episode put behind us."

Besides, he added, "This case was between the United States government and Anderson, not between Semnani and Anderson."

When he is sentenced Nov. 1, Anderson faces up to 14 years in federal prison — he could receive up to five years for tax evasion and up to three years for each of three false-tax-return counts, U.S. Attorney's Office spokeswoman Melodie Rydalch said. He also faces fines of more than $1 million in a civil case that may mean he would have to return any illegally obtained assets.

Earlier this year, Anderson rejected a plea agreement that would have given him just one year of incarceration in a federal prison camp and about $30,000 in fines. But going into the trial, Anderson faced up to 37 years in prison and $3 million in fines.

The jury's verdict came after seven days of testimony where prosecutors argued that Anderson violated the public trust when he used his position to extort hundreds of thousands of dollars from Semnani, whose business he regulated.

"Mr. Anderson was a powerful man," Assistant U.S. Attorney Elizabethanne Stevens said in closing arguments Wednesday. "Every day he went to work he was depriving the citizens of Utah of his honest service."

Federal prosecutors spent the past week trying to convince jurors in U.S. District Court that Anderson was guilty of extortion, mail fraud and tax evasion.

They argued that Anderson knowingly broke the law when he withheld on his tax returns money in a Swiss bank account that Semnani deposited.

But Mooney argued that Anderson was the victim of Semnani, who cheated Anderson out of a $500 million business plan.

"All we have is Mr. Semnani's word" that extortion occurred, Mooney said. And, he added, the fact Semnani reneged on the deal "does not mean Anderson was not entitled to the money."

Mooney told jurors that they could not convict Anderson if they had reasonable doubt that he extorted money from Semnani.

Prosecutors contend that Anderson used his authority to grant Envirocare's license for a low-level radioactive waste site in remote Tooele County to benefit him personally by extorting money from Semnani when Anderson oversaw radioactive waste facilities in Utah. It began with a couple of $1,000 loans in 1987 and reached a written demand for $7.6 million in 1995, prosecutors said.

"Anderson wanted to be the gatekeeper of all things related to Envirocare," Stevens said. Because, she added, it would benefit Anderson.

Semnani testified earlier in the week that he thought Anderson may pose a threat to his business if he didn't pay. So, Semnani paid to avoid trouble and public embarrassment, but the demands became outrageous, he said.

But Mooney told jurors that is hard to believe.

"Semnani is afraid of Anderson?" Mooney questioned. "This is a very powerful person, a person who loans money to governors, senators, and he's afraid of some midlevel regulator?"

Mooney said Semnani was trying to get out of a business deal a year after they had reached a business deal.

Anderson said it was in late 1986 that he first showed Semnani 20 to 25 pages of handwritten notes that outlined a plan for a lucrative business.

Semnani said the shakedown occurred nearly a year later in the summer of 1987 after he applied for an Envirocare permit.

Anderson may have made some mistakes, Mooney added. But it doesn't prove that he willingly deceived Utahns, he added.

"You may not like Mr. Anderson," Mooney told jurors. "He got caught in a situation. He should have disclosed it, but that doesn't mean he's guilty of mail fraud."


E-MAIL: donna@desnews.com ; lhancock@desnews.com