Topic: Tax Preparer Fraud
In what some are calling the largest tax fraud prosecution in history, Donna Guerin Esq. entered a guilty plea in U.S. District Court to one count of conspiracy to defraud the United States and one count of tax evasion. The Chicago based attorney admitted to helping wealthy clients dodge tens of millions of dollars in taxes through falsely reported losses. She now faces up to 10 years in prison and has agreed to forfeit $1.6 million in penalties. When asked by the judge if she knew that what she was doing was wrong and illegal she replied, “I came to that understanding over time.”
Investigation revealed that from 1994 through 2004 Guerin had used tax shelters to produce more than $6 billion in phony tax loses that customers could use to reduce their tax obligations. She further advised clients on how to conduct complex transactions that allowed them to wipe out financial gains and even provided opinion letters to her clients helping them assert that the deals were legitimate. According to the government one tax shelter in particular marketed from 1998 to 2000 produced “at least $3.9 billion in bogus tax losses for no less than 550 wealthy individuals.”
During a trial that lasted 10 weeks and included 9,200 pages of testimony from 41 witnesses and 1,300 pieces of evidence, it was learned that the scheme had benefitted some of the “richest investors in the world.” The list included the late sports entrepreneur Lamar Hunt, trust fund recipients, investors, a grandson of the late industrialist Armand Hammers, and a man who was one of the earliest investors in Microsoft.
It is clear that criminal tax prosecution is not limited to only taxpayers but also to those that aid and/or facilitate such criminal behavior.