Font Size: 
Three Former Jenkens & Gilchrist Tax Lawyers Indicted
Texas Lawyer
June 10, 2009
Three former shareholders in the Chicago office of defunct Jenkens & Gilchrist are among seven professionals charged Tuesday in a 78-page indictment (pdf) that alleges they "participated in a scheme to defraud the IRS by designing, marketing, implementing and defending tax shelters" from 1994 through 2004.
Dallas firm Jenkens & Gilchrist closed its doors on March 31, 2007, after negotiating a nonprosecution cooperation agreement for alleged criminal tax violations linked to the firm's former Chicago-based tax-shelter practice. The firm also negotiated a civil settlement with the Internal Revenue Service and agreed it was subject to a penalty of $76 million, resulting from the firm's alleged promotion of what the IRS called "abusive and fraudulent tax shelters."
The 27-count indictment filed Tuesday in the U.S. District Court for the Southern District of New York names Paul Daugerdas, a former Jenkens shareholder who led the firm's tax practice; former Jenkens shareholders Erwin Mayer and Donna Guerin; Denis Field, a former chief executive officer of accounting firm BDO Seidman; Robert Greisman, formerly a tax partner in BDO Seidman's Chicago office; Raymond Craig Brubaker, a former banker from Bank A's Dallas office; and David Parse, a former banker at Bank A's Chicago office. Bank A is identified only as a foreign bank with U.S. headquarters in New York.
Among other things, the indictment charges all defendants with conspiracy to defraud the IRS and to evade taxes, and charges all except Parse with multiple counts of tax evasion in connection with the alleged use of tax shelters for clients. The indictment also charges Daugerdas and Mayer with tax evasion based on their alleged use of fraudulent tax shelters to eliminate or reduce their personal taxes between 1999 and 2001.
Daugerdas did not return telephone messages left at his office and at his home in Wilmette, Ill., and Mayer did not return a message left at his home in Winnetka, Ill.
In an e-mail speaking on behalf of Daugerdas, Margarite Wypychowski, vice president of Carolyn Grisko & Associates Inc., says, "Paul Daugerdas firmly believes that the tax advice provided to his clients was well within the scope of then-existing federal tax law. These opinions were reviewed by numerous attorneys at the law firm that employed Mr. Daugerdas as well as his clients’ advisors and other tax professionals. He categorically denies any participation in or approval of any wrongdoing in connection with his rendering of professional legal services. To the extent that there is disagreement over interpretation of federal tax law in the opinions issued, it should have been treated solely as a civil matter. The recently announced federal prosecution attempts to improperly convert a professional tax advisor's honestly held legal opinion into a criminal offense. Mr. Daugerdas is dedicated to the rule of law. He intends to vigorously defend himself against these unfounded charges, and believes that he will ultimately be vindicated."
Guerin's attorney, Robert Rotert of Stetler & Duffy in Chicago, says in an e-mail that Guerin "has never committed a criminal offense in her life and she certainly is not guilty of any charge contained in the indictment returned in New York." He writes that Guerin looks forward to being found not guilty, and will have no further comment until that takes place.
A telephone listing for Field was not available in Naples, Fla., and Greisman did not return a message left at his home in Deerfield, Ill. Telephone listings for Brubaker of Plano and Parse of Elmhurst, Ill. could not be found.
In a written statement, Lev L. Dassin, the acting U.S. Attorney for the Southern District of New York, writes, "We are dedicated to holding accountable tax and financial professionals whose deceit and fraud cost this country millions in tax revenues. The allegations contained in the indictment reflect a brazen disregard for the law."
IRS Commissioner Doug Shulman writes in a statement, "In today's economic environment, it's more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe."
This article first appeared in the Tex Parte Blog.
