News at the end of last week that the Manhattan district attorney, Robert Morgenthau, has indicted Beacon Hill Service Corp. for illegally transferring more than $3 billion dollars overseas is good news for New York City. First off, given the sums of money in question, it is possible that the city, state, and federal government were being cheated out of tens of millions of dollars in tax revenue. We’re all for lower taxes, but it ought to be the business of politicians to cut them, not crooks to evade them.

Moreover, Mr. Morgenthau told The New York Sun yesterday that he thinks some of the money might have been going to terrorists. “Some of the money is going to areas where terrorists play,” he said, mentioning Syria and Riyadh and Abu Dhabi. During 2001 and 2002, according to Mr. Morgenthau, wire transfers from just four accounts at Beacon Hill totaled more than $3.2 billion. “I think it’s a fair assumption that a very high percentage of the money going into Beacon Hill is either illegally obtained or there for tax evasion purposes,” Mr. Morgenthau said. The company has denied wrongdoing.

The indictment is part of a continuing investigation by the D.A. into credit cards being issued by offshore banks and used here in New York City. Given the number of credit card solicitations from on-shore banks we all seem to be bombarded with daily, it’s worth wondering just why someone would go to the trouble to carry a card like that. It’s one perfectly defensible thing for a business or person to minimize taxes legally by moving to a low-tax jurisdiction. There are legitimate offshore assets and income. It’s another thing entirely, however, to try to live as a New Yorker and enjoy the city’s services on income and assets that are not properly disclosed to the New York tax collectors.

This indictment shows once again just how leveraged is every city dollar allocated to the district attorneys’ offices. According to Mr. Morgenthau, every dollar given to the district attorneys comes back to the city roughly eight to 10 fold in city and state tax enforcement. That’s in addition to the peace of mind that comes from knowing millions of dollars aren’t flowing to terrorists undetected. With tens of millions of dollars at stake, the district attorneys shouldn’t have to argue with the mayor for the resources needed to follow the money. Mr. Morgenthau told the Sun his office has 270 boxes of records relating to Beacon Hill. It’s a labor intensive process going through them, and so far the office has only come up with a few people to link with accounts. “I think the whole business of tax evasion and tax fraud is really getting out of hand, and it’s huge,” Mr. Morgenthau said. “This huge leak in the revenue system needs to be plugged.”

We wouldn’t want to press this point too far — we’d prefer the prosecutors enforce the laws impartially rather than single out the rich for extra scrutiny as potential cash cows. But if a few wealthy tax evaders are nailed and made to pay their fair share, the honest taxpayers, rich and poor alike, might be able to pay less in the end. “For the honest guy who’s paying his taxes to know that someone else is not paying his taxes is discouraging,” Mr. Morgenthau said. “I personally think taxes are too high, but you’re never going to lower them while people are paying no taxes.”