Thursday, May 31, 2007
The rocky KPMG tax shelter prosecution has not made the U.S. Attorney's Office for the Southern District of New York gun-shy about bringing complex tax cases, as evidenced by the indictment of four tax partners from national accounting firm Ernst & Young on conspiracy, tax evasion, false statement, and obstruction charges (indictment below). Three of the four defendants, Robert Coplan, Martin Nissenbaum, and Richard Shapiro, are tax lawyers who were partners specializing in personal income tax planning; the fourth defendant, Brian Vaughn, is an accountant who headed up the sales of the tax shelters. Unlike the KPMG prosecution, the indictment alleges that Coplan, Nissenbaum, and Shapiro used one of the tax shelters to evade taxes on their own income, which puts the case in a bit different light by focusing on their personal gain from the tax avoidance program. In addition to the conspiracy charge, Coplan and Nissenbaum are accused of obstructing an IRS investigation,and Coplan and Vaughn are charged with making false statements to the IRS in its investigation. E&Y issued a press release that largely brushes aside the charges against its partners, noting that "[t]hey were part of a small group within the firm, disbanded years ago . . . ." I assume the government would prefer to draw someone to preside over the case other than U.S. District Judge Lewis Kaplan, who is overseeing the prosecution of the eighteen defendants related to the KPMG tax shelters. An AP story (here) discusses the charges.