Articles Posted in Tax Shelter Fraud

On May 24, 2011, several attorneys from now-defunct law firm Jenkins & Gilchrist and a former executive of BDO Seidman, LLP were convicted in the United States District Court for the Southern District of New York for their roles in developing, promoting, marketing and implementing fraudulent tax shelters, and drawing unwanted attention from New York securities lawyers in the process. A press release (link below) from the United States Attorney for the Southern District of New York stated that the convicted individuals made profits of approximately $130 million over ten years with the fraudulent tax shelters. The Department of Justice worked with the Internal Revenue Service (IRS) to investigate and prosecute the action.

Federal prosecutors had alleged that the tax shelters at issue generated more than $1 billion in false tax losses for high net worth individuals.

Tax shelters are generally understood to be schemes that reduce one’s tax liability, and are not necessarily illegal. In fact, it is entirely within one’s rights to minimize their tax liability, albeit legally. The development of tax shelters that skirted and sometimes flagrantly flouted the United States Tax Code occurred mainly in the late 1990s and early 2000s and have led to convictions of professionals from some of the Country’s most well-respected law firms, and the world’s largest banks and accounting firms.