Legal Ethics

L.A. Lawyer Pleads in Quellos Case, Admits He Didn't Pay Tax on $35M Offshore Account

A Los Angeles lawyer has pleaded guilty and agreed to accept up to a five-year prison term in a tax shelter scheme that involved a $35 million offshore account.

Matthew Krane, 55, pleaded guilty in federal court in Seattle yesterday to tax evasion and passport fraud concerning an alleged Quellos Group LLC investment company scheme, according to Puget Sound Business Journal and WebCPA articles that are largely based on Internal Revenue Service press release (PDF).

He admittedly did not pay taxes on a $35 million payment made to an offshore account that he controlled. It was made in exchange for Krane’s help in working with former Quellos CEO Jeffrey Greenstein, 47, and attorney Charles Wilk, 51, of Seattle to enroll a wealthy client in the Quellos shelter, according to the indictment in the case.

Krane also admitted in the plea agreement that he applied in February 2008 for a passport under a false name, knowing he was under investigation.

He will be sentenced in March in U.S. District Court, and the two other defendants are scheduled to go to trial later next year.

Earlier coverage: “2 Lawyers Charged in $400M Tax Shelter Prosecution of Former Quellos CEO” “Jailed Attorney Sues Billionaire Ex-Client, Seeking to Retain $36M Quellos Fee”

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