Criminal Justice

Former Arnold & Porter Partner Pleads Guilty in Tax Shelter Case

A former Arnold & Porter partner who provided opinions on the legality of Ernst & Young tax shelters has pleaded guilty to tax charges.

Peter Cinquegrani of Baltimore pleaded guilty yesterday to conspiracy to commit tax fraud, aiding and abetting tax evasion, and aiding in the submission of false and fraudulent documents to the Internal Revenue Service, the New York Law Journal reports. He faces a maximum of five years in prison on the first two counts and three years on the fraudulent documents charge when he is sentenced in Manhattan federal court Dec. 11.

Cinquegrani worked at Arnold & Portner from 1986 through 1993 and from 1997 to 2007. In the interim he was a lawyer with the IRS. He became a partner at the law firm in 2002, Reuters reports. He is accused of helping develop the tax shelters, marketed to high-income Ernst & Young clients beginning in 1998, and creating a legal opinion to support them, the Reuters story says.

Arnold & Porter has agreed to pay a civil tax shelter promoter penalty for failing to comply with tax shelter registration requirements and for its involvement in tax shelter transactions from 2000 to 2002, Reuters reports. The amount of the penalty was not disclosed.

A statement released by Arnold & Porter said the law firm cooperated in the investigation. “The firm previously entered a civil settlement with the Internal Revenue Service in connection with these transactions, and has resolved all related private civil claims,” the statement said.

Updated at 2:17 p.m. to state that Cinquegrani could face three years for the documents charge.

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