White-Collar Crime

Ex-partner of law firm indicted, accused of aiding unlawful use of energy tax credits by clients

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An Illinois lawyer has been federally indicted in what the government describes as a scheme to promote the unlawful use of alternative-fuel-generation tax credits by his clients, while working as a partner at a Chicago law firm.

The indictment against Gary J. Stern says he “aided and assisted in, and procured, counseled, and advised the preparation and presentation to the IRS of at least 55 joint and individual Form 1040 tax returns for tax years 2006, 2007 and 2008, which falsely claimed FNS tax credits in the total amount of $4,898,076.”

Meanwhile, an unidentified attorney working for Stern at the law firm had prepared a memo for him stating that the tax credits could not legally be used in the manner that Stern assured clients they could be used, the indictment alleges. It does not identify the law firm, which is not accused of any wrongdoing. However, the firm was identified in an earlier Department of Justice civil complaint against Stern as Chuhak & Tecson.

Stern is charged with a “corrupt endeavor” to obstruct or impede the Internal Revenue Service from collecting income tax and multiple counts of assisting in the provision of false tax returns to the IRS.

He and his lawyer told the Chicago Tribune (sub. req.) that he acted lawfully.

“Gary Stern is a thoughtful lawyer who didn’t do anything wrong here, and we’re going to prove that in court,” attorney Chris Gair said.

Stern, who has been in practice since 1983, currently operates his own law firm in a Chicago suburb, according to an Illinois Attorney Registration & Disciplinary Commission website.

He settled the earlier DOJ complaint but is reportedly still engaged in ongoing civil litigation brought by former clients who were professional football players.

Related coverage:

ABAJournal.com: “Tax lawyer and DOJ settle suit over claimed $16M shelter scheme; suit by football players ongoing”

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