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Saturday, March 2, 2013

Ex-Jenkens & Gilchrist Partner Gets 8 Years in Tax Shelter Case

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Bloomberg:  Ex-Jenkens & Gilchrist Lawyer Gets 8 Years in Tax Case:

Donna Guerin, a former partner in the defunct law firm Jenkens & Gilchrist, was sentenced to eight years in prison and ordered to pay $190 million for her role in what the U.S. called the largest criminal tax fraud in history.

Guerin, 52, pleaded guilty in September 2012 just as she was set to be retried with three other defendants for running a 10-year scheme that created $7 billion in fraudulent tax deductions, more than $1.5 billion in phony losses and $92 million in actual losses to the U.S. Treasury. ...

[U.S. District Judge William] Pauley ordered Guerin to report to prison on May 14. The judge also directed her to pay $200,000 before she surrenders to U.S. prison authorities and said she must turn over 20 percent of her gross income after she’s released from prison. ...

During her guilty plea Guerin said she worked on tax shelters with Paul Daugerdas, also a defendant in the case, while the two were lawyers at former Chicago-based firm Altheimer & Gray. The two joined Dallas-based Jenkens & Gilchrist in 1998, she said, and continued their work in helping clients shelter income.

Guerin admitted she advised clients on how to conduct complex transactions that allowed them to wipe out financial gains. Guerin said she also provided opinion letters to her clients helping them assert that the deals were legitimate.

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2013/03/former-jenkens-gilchrist.html

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Comments

On a related note, late in the Friday news feed, Ernst & Young and federal prosecutors settled the long running drama over E&Y's tax shelter promotions (COBRA and CARDS, among others), with E&Y coming out on the short end of the stick to the tune of $123 million. A lot less than KPMG but more than BDO Seidman.

Posted by: Jake | Mar 2, 2013 4:15:24 PM

The $190 Million restitution number is a joke. A meaningless PR stunt by the judge (as are most restitution awards).

If she only has to pay 20% of her gross hearings towards restitution, that means she needs to gross $950 million before she/we break even. Give me a break!

Posted by: Doug | Mar 2, 2013 7:03:55 PM