Friday, June 21, 2013

Conviction Reversed, Attorney Reinstated

The New York Appellate Division for the Second Judicial Department has reinstated an attorney in light of the reversal of his tax fraud conviction by the United States Court of Appeals for the Second Circuit.

Crain's New York Business has this report

Five years ago, a Brooklyn accountant named Martin Nissenbaum (pictured) was indicted and charged with trying to defraud the U.S. government by helping clients set up bogus tax shelters. But this was no ordinary accountant and no ordinary criminal case: Mr. Nissenbaum was the national director of the personal income-tax and retirement planning practice at Big Four accounting firm Ernst & Young...

The tax-shelter cases were inherently complex, but they boiled down to an easily understood image of highly paid accountants and lawyers offering the nation's wealthiest people their hush-hush advice on how to cheat Uncle Sam.

"Prosecutors really wanted to get somebody," recalled Nathan Lewin, a prominent defense lawyer in Washington, D.C., "and judges and juries were ready to accept what the government asserted."

Mr. Nissenbaum was the star defendant of these cases—or as much of a star as an accountant can be. His celebrity rested on being frequently quoted in The Wall Street Journal and helping to write such books as Ernst & Young's Personal Financial Planning Guide.

He fought the charges, but the government had email evidence that seemed to lay bare his role in designing the tax-avoidance schemes. In the eyes of jurors, it probably didn't help that his team, known within the firm as Value Ideas Produce Extraordinary Results, called itself the VIPER group. Ernst & Young wasn't charged, although in 2003 it had agreed to pay the Internal Revenue Service a $15 million penalty related to its shelters.

After a 10-week trial in 2009, a jury convicted Mr. Nissenbaum. He was sentenced to 30 months in prison, fined $100,000 and ordered to perform 120 hours a year of community service after his incarceration.

Last week, Mr. Nissenbaum received stunning news. By a 2-to-1 vote, the U.S. Court of Appeals threw out his conviction. The panel wrote that the crux of the government's case against Mr. Nissenbaum—a single email—"is simply not enough" to warrant conviction.

"The question is how do you get your reputation back, and he had a phenomenal one," said Mr. Lewin, who represented the 56-year-old Mr. Nissenbaum before the appellate court.

(Mike Frisch)

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