Former Ernst and young partners charged with tax fraud conspiracy
Four present and ex of Ernst and Young, the massive accounting firm in New York City, were charged with crimes involving tax fraud conspiracy and tax shelters, which assisted some of the wealthy to escape income taxes of more than $10 million. The indictments were filed Wednesday, May 30, 2007.
Los Angeles, California, May 31, 2007 - These four personnel operated under a group set up by the firm last 1998 for the purpose of developing tax shelters. This formation was according to the indictment filed in the Manhattan U.S. District Court.
They allegedly swindled the Internal Revenue Service or IRS from the years 1998 to 2004. Their defrauding activities involved selling, marketing and designing fraudulent tax shelters. According to U.S. Attorney Michael Garcia, the charges are targeted on tax experts or professionals whose deceitful activities are costing the country tax revenues amounting to millions.
VIPER was the name of the group the defendants have joined. It means "Value Ideas Produce Extraordinary Results." It was later renamed to SISG or "Strategic Individual Solutions Group."
The defendants were Robert Coplan, 54 who is a lawyer and former branch chief of IRS Legislation and Regulations Division; Martin Nissenbaum, 51, also a lawyer; Richard Shapiro, 58, lawyer and account, and Brian Vaughn, 39.
The former partners are Coplan and Vaughn. Shapiro and Nissenbaum presently are partners and are on "administrative leave" from the firm.
The charges against them are obstructing and damaging the lawful IRS functioning, conspiracy to deceive IRS, composing false official documents and statements and tax evasion.
Ernst & Young stated that the accused persons were not anymore part of the firm's management. They were only members of a small group in the firm with obligations to certain transactions that is presently an issue in the case. The company also declared that the said group had been broke up years ago.
Furthermore, according to the charges, the accused persons and their conspirators have known that once the IRS detected the utilization of tax shelter benefits by the clients, they will be challenged aggressively.
According to IRS, the alleged Ernst and Young personnel hid their tax fraud crimes by creating fraudulent documents containing falsified clients' descriptions. Particularly, concerning the motivations of the clients in claiming said tax benefits.
The lawyers of the defendants and the clients involved in the tax frauds claimed that they were innocent and were only cooperating with the firm's authorities since the beginning of their investigations.
The company committed cooperation to the IRS investigations. The firm also stated that they had obligingly made various amendments and improvements to their tax practices ever since the IRS investigations.
