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In May 2006 Larry Williams was arrested in Sydney by federal police. Up until recently Williams was confined to the Sydney CBD awaiting possible extradition to the US on tax evasion charges. He can now go anywhere in Australia, so long as he posts his movements to police. Karin Derkley speaks to him from his Sydney apartment.

What does a futures trader and educator do when he’s got the US Internal Revenue Service after him for tax fraud? Hunker down and hope to God he can stop the Australian government extraditing him back to the US to face the charges. Larry Williams, futures trader, claims he has broken no US laws and caused no financial loss to the US government, but he is not keen to test his word against that of the mighty IRS. “It’s just one guy, me, against the might of the US government and the IRS,” he said from his apartment in Sydney’s CBD, where he has spent the past year working to clear his name. “That’s the melodrama of it all.”

Before May last year Larry Williams was at the top of his game. A futures trader for the past 40 years, he is celebrated for his trading indicators -the Williams %R and the Ultimate Oscillator – and was a winner of the Robbins World Cup Trading Championship in 1987: his performance of 11,376% has not been bested. He has written ten books on trading, was on the cover of Active Trader and was interviewed on CNBC and Fox in the US.

The ‘melodrama’ started last year on May 20 when Williams, then 64, was in the middle of a world tour sharing his insights into the futures market with thousands of wanna-be champion traders. Arriving at Sydney airport for the Australian and New Zealand leg of his tour he was descended on by the Australian Federal Police waving an indictment for his arrest and extradition back to the United States to face charges of evading income tax there.

His passport was confiscated and he was imprisoned for some nights at Silverwater in Sydney. After $1 million was posted for bail on his behalf, he was freed on the requirement that his movements be restricted to Sydney’s CBD. The restrictions were later relaxed on the condition that he notify police of any movements within the country outside of the Sydney CBD.

Since then Williams has managed to get the first extradition bid overthrown, but an appeal by the Australian Government has been scheduled for the Federal Courts in mid July. His lawyers are contesting the new extradition attempt on technical grounds. As Williams says: “you’ve got to use every legal tool you have at your disposal”.

Whether Williams is guilty of the alleged charges, will only be known if he is extradited back to the US. He claims he never intended to break any laws: “I’ve put in a tax return every year”, he insists. But clearly, “in some way or other I have responded incorrectly to something,” he acknowledges. He claims he’s had bad advice, that he, along with others, may have been defrauded himself.

But even if he were proven to have evaded his taxes, does that make Williams a fraud as a trader and a seminar ‘guru’? Here in Australia, consumer activist Neil Jenman, amongst others, was quick to lump him in with other ‘get-rich-quick’ gurus including disgraced US property investment guru Robert G Allen, who was pursued by the ACCC for “misleading and deceptive conduct”, as well as our own home-grown investment scammer Henry Kaye.

It didn’t help that one of Williams’ seminar party tricks is the “Million Dollar Challenge” where he trades live on stage with his own money, and shares a part of the profits to his audience. He says he did it to counter accusations that he’d somehow fudged the Robbins Trading Championship by using multiple trading accounts to hide his losing trades, an allegation he says is as ridiculous as it would be impossible to orchestrate: “If all the wins went in one account, and the losses in another, how did we know when the trade was placed as to what account to place the trade in?” The idea with the Challenge was that he’d be trading real money in front of roomful of people. “No way could there be any hanky-panky.” Unfortunately it hasn’t silenced his critics, who accuse him of stage trickery.

The never-ending criticism has been as wearisome to Williams as the tax allegations, and his frustration shows when asked to respond to specific criticisms that admittedly arise from anonymously penned postings on internet stock forums. “These people should be given no credibility,” he says, “they use false names and innuendos that fly in the face of all logic.” But even before the tax troubles he had his detractors, he says. “That’s what happens when you’re a high profile person,” he says. “There’s a lot of jealousy out there.”

He says he’s never claimed to be an investment guru, isn’t interested in the ‘get rich quick’ types, and only does seminars because he loves sharing his knowledge with other people. “Sure they help with the cashflow. When you’re a trader you don’t know for sure whether you’re going to make money that month, and like any sensible business person, I try to diversify my income streams. But I like to make a difference in people’s lives. I like seeing the light go on in their eyes when they understand something about the market.”

He’s never advocated in his seminars an ultimate solution, or a magic formula to beat the market, he says. “What I teach takes time to learn and understand, so the get-rich-quick people are likely to switch off before that light goes on.” The other difference between him and the other spruikers is that the information is all there in the seminar, he says. “With the others the way they really make money is at the back of the room when you shell out the thousands for the trading system or whatever. With me they get constant contact with via email or calls if they want for no additional fee – many of these last for years.”

To those who claim that he makes his real money from seminars, he says he doesn’t ever have to give another seminar again. “I can do okay just from my trading.” Which is what he’s doing now while he’s holed up in his Sydney apartment waiting to see whether his lawyers can come up with something to thwart the government’s latest extradition attempt. His commodity timing account was up 100% last year, and 30% so far this year on a total he says his lawyers won’t let him reveal. That’s in between training for his marathons, and answering emails from supporters and annoying journalists wanting to rake over all the old rumours and scuttlebutt.

And if he has to stay here in Australia, he’d manage, he says. “This is one cool place,” he says. “I could easily spend rest my life here. I think I could do a lot of positive things here.” If only everyone else wasn’t so damn negative.