Ex-CPA Gets 15 Years in Billion-Dollar Tax Fraud
Former attorney and CPA Paul M. Daugerdas, 63, has been sentenced to 15 years in prison for orchestrating a massive scheme in which he and co-conspirators hawked fake tax shelters for wealthy individuals to evade more than $1.6 billion in federal taxes.
Last October, he was convicted following a seven-week jury trial presided over by U.S. District Judge William H. Pauley III, who imposed Wednesday’s sentence in a Manhattan federal court. Daugerdas was convicted of conspiring to defraud the IRS, to evade taxes, and to commit mail and wire fraud, and of corruptly endeavoring to obstruct and impede the internal revenue laws. He was also convicted on four counts of tax evasion and of mail fraud.
Judge Pauley also ordered Daugerdas to forfeit $164,737,500 in proceeds from the crimes, including a shorefront home on Lake Geneva in Wisconsin and more than $20 million in securities and financial accounts.
Authorities said Daugerdas personally received more than $95 million in fees from the scheme, which generated more than $7 billion in fake deductions. Daugerdas also used shelters to slash his taxes on the proceeds from more than $32 million to less than $8,000.
Judge Pauley ordered Daugerdas to pay $371,006,397 in restitution to the IRS, saying that Daugerdas “was at the apex of tax shelter racketeers who tapped into the greed of the super wealthy who did not want to pay taxes.”
Daugerdas was convicted in a retrial for what U.S. prosecutors called the biggest criminal tax fraud in history, while former BDO Seidman CEO Denis Field was acquitted in late 2013.
Daugerdas, of Wilmette, Ill., hatched the plan decades ago while at accounting giant Arthur Andersen, and continued it while a partner at two law firms: Altheimer & Gray and then Jenkens & Gilchrist.
