Saturday, March 12, 2011

Disbarred For Tax Shelter Advice

The New York Appellate Division for the Second Judicial Department held that a federal conviction for conspiracy to defraud the IRS and evade taxes is "essentially similar" to a state felony and thus results in automatic disbarment. The court's analysis:

In determining whether a "foreign" or federal felony is "essentially similar" to a New York felony, this Court may consider other factors, including the plea allocution and trial record (see Matter of Woghin, 64 AD3d 5; Matter of Port, 57 AD3d 139; Matter of Fury, 145 AD2d 259; Matter of Ashley, 263 AD2d 70). According to the petitioner, the respondent "was convicted of conspiring with others to create and implement illegal tax shelters for clients of Ernst & Young as well as for his own personal tax benefit. This scheme included making false statements and providing false documents to the IRS as well as understating his personal income." Further, the respondent "was convicted of filing a fraudulent U.S. Individual Income Tax Return, Form 1040, which substantially understated his taxable income." The respondent does not object to this description of the offense, but points out that he "was not convicted of filing a false tax return which substantially understated his taxable income. Rather, the tax evasion counts of [the] conviction[s] related to the tax returns of clients of . . . Ernst & Young." Further, the respondent consents to his name being stricken from the roll of attorneys.

(Mike Frisch)

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