September 11, 2001, has been linked to a number of criminal activities and now we can add tax fraud to the list.
The Internal Revenue Service has announced that Robert Coplan, a former IRS lawyer, and Martin Nissenbaum, Richard Shapiro, and Brian Vaughn, partners in the accounting firm of Ernst & Young, have been charged with conspiracy to defraud the IRS, tax evasion, making false statements, impeding the IRS and related offenses. Prosecutors allege that the four defrauded the IRS over a period of six years with the use of tax shelters which they created and marketed as a method to hide money.
The indictments allege that the four defendants created documents containing false and fraudulent descriptions of the clients’ motivations for entering into the transactions, which were reportedly created by the defendants to avoid paying taxes. Coplan is alleged to have argued that the crux of the plan, marketed to legal and investment professionals for their wealthy clients, was to “make our strategies appear to be investment techniques that have advantageous tax consequences.” He further urged clients to attribute their decision to discontinue trading partnerships after receiving favorable tax treatment to the September 11, 2001, terrorist attacks and to “possible economic repercussions resulting from such attacks” as a reason for their activities.
Not surprisingly, all of the defendants have pleaded not guilty.
And if you’re getting deja vu all over again, it might be a result of the investigation into suspected wrongdoing at Jenkens Gilchrist. Ernst & Young has been named in several suits involving tax shelter advice brought against Jenkens. Robert Coplan is one of the folks who ratted Paul Daugerdas out, claiming that Daugerdas masterminded the sales of the tax shelters for which Jenkens performed the legal work.
If your head is spinning from all of the tax shelter rumblings, it should be. Prosecutors allege that activities such as those that Coplan and his partners have been accused of have been ongoing since the mid-1990s. In one year alone, the IRS believes that these shelters have cost the federal government between $14 and $18 billion (with a b) in lost revenue.
