Thursday, October 26, 2006
The Department of Justice yesterday announced that former Kirkland & Ellis partner Robert Wayne Hallock was convicted of tax evasion in attempting to hide over $1 million he obtained by selling fraudulent Certificates of Deposit. (The indictment pegged the amount of unpaid tax at $325,000 - $550,000.) Joe Kristan nicely summarizes the scam:
Step 1: Sell fraudulent certificates of deposit for $1.8 million.
Step 2: Set up a bank account in the name of an LLC in Florida for the money.
Step 3. Hire somebody to use the money to buy cashiers checks.
Step 4. Procede to blow hundreds of thousands of dollars on a girlfriend, a wedding, a honeymoon, and his Barrington, IL. lifestyle.
Step 5. Leave the money off your tax return.
Joe also unearthed Hallock's trial memorandum, which argued that since Hallock was obligated under the UCC to repay the money, he did not have any income -- in his words, "a good faith belief, even if crazy, negates willfulness." For more, see today's Chicago Tribune.