Former Kirkland & Ellis bankruptcy partner Theodore Freedman was sentenced Tuesday by a New York federal judge to one year and one day in prison for committing tax fraud by underreporting his partnership income.
Freedman, who resigned from Kirkland's restructuring group in 2010, pleaded guilty to four counts of tax fraud in March. As New York Law Journal reported at the time, the 66-year-old Freedman admitted to underreporting his income by more than $2 million between 2001 and 2004. As part of a plea deal with the government, he is required to pay $671,219 in restitution to the Internal Revenue Service and $169,309 to New York State. After finishing his prison term, he will be under supervised release for three years.
Freedman, represented by Paul Shechtman of Zuckerman Spaeder, faced a maximum of three years in prison on each count. Assistant U.S. Attorney Jonathan Cohen, writing to U.S. District Judge Deborah Batts in a sentencing memo, said that "Freedman was motivated by greed, not need," and asked Batts for a sentence within the guidelines range of 24–30 months.
Federal prosecutors indicted Freedman in July 2011, claiming that by underreporting his income, he failed to pay more than $1.01 million in federal income taxes. Prosecutors alleged that Freedman falsely stated that he ran a solo legal practice in upstate New York when he was in fact "a senior partner in a major United States law firm."
The indictment against Freedman said that he earned roughly $5.4 million in compensation from Kirkland between 2001 and 2004, but claimed just $3.29 million in partnership proceeds. He also falsely claimed to have sustained losses of $542,358 in expenses from his fictitious solo practice, according to the charges.
Shechtman said Wednesday that his client had no comment. Freedman's law license is currently listed as suspended in New York State Bar records.
Hamblett is a reporter at Am Law Daily affilliate New York Law Journal.