White Collar Crime

Guilty Plea in Tax Shelter Case

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One of five remaining defendants has pleaded guilty in the government’s prosecution of advisers accused of working with KPMG to set up phony tax shelters.

David Amir Makov pleaded guilty to one count of conspiracy to commit tax fraud and agreed to repay $10 million, the Wall Street Journal reports (sub. req.). He pledged to cooperate in prosecutions of other defendants and will be sentenced at a later date.

The New York Times says the guilty plea “puts back on track a faltering case that had become, to the consternation of prosecutors, a referendum on the constitutional rights of white-collar defendants, rather than the largest criminal inquiry ever into abusive tax shelters.” A federal judge dismissed charges against 13 of 18 defendants in July because the government had pressured accounting firm KPMG to cut off their legal fees.

Makov read a statement in Manhattan federal court implicating two other men who worked with him at Presidio Advisory Services and a former partner at Sidley Austin who provided tax opinion letters, the Journal says.

The plea is also expected to help the government probe of the bank identified as Bank A in Makov’s plea agreement. The Times reports the bank is Deutsche Bank, although it has not been charged in the case.

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