Paul Daugerdas, who once ran the law firm's Chicago office, had
been found guilty by a New York federal jury on charges including
conspiracy, tax evasion and mail fraud.
Prosecutors said Daugerdas reaped $95 million from the scheme, which
involved fraudulent tax deductions or benefits exceeding $7 billion
and $1.63 billion in lost U.S. tax revenue.
U.S. District Judge William Pauley, who imposed the sentence, said
Daugerdas had "tapped into the incredible greed of the wealthy," and
corrupted numerous professionals to advance a scheme to promote
fraudulent tax shelters.
"Daugerdas is in a class by himself," Pauley said. "He was at the
apex of tax shelter racketeers."
Pauley also ordered Daugerdas to forfeit $164.7 million and pay $371
million in restitution jointly with other co-conspirators.
Prosecutors said Daugerdas, 63, devised and supervised the promotion
of fraudulent tax shelters over almost two decades. They said much
of the fraud took place while he worked at Jenkens & Gilchrist,
which Daugerdas joined in 1998.
Other attorneys at the 600-lawyer firm as well as co-conspirators at
Deutsche Bank AG and accounting firm BDO Seidman helped carry out
the fraud, prosecutors said.
Jenkens & Gilchrist, based in Dallas, dissolved in 2007 after
agreeing to pay a $76 million penalty to the Internal Revenue
Service in connection with the investigation.
Daugerdas was indicted in 2009. A jury found him guilty in 2011,
along with former Jenkens partner Donna Guerin; Denis Field, BDO's
former chief executive; and David Parse, a Deutsche Bank broker. The
jury acquitted another Deutsche broker, Raymond Brubaker.
Parse was sentenced in 2013 to 3-1/2 years in prison. Daugerdas,
Guerin and Field won a retrial after the judge determined a juror
had lied during jury selection, a fact Pauley recounted Wednesday in
questioning why prosecutors had not brought charges against her.
[to top of second column]
Guerin pleaded guilty to conspiracy and tax evasion charges ahead of
the second trial and was sentenced last year to eight years in
At the retrial, Daugerdas was found guilty on seven of the 16 counts
he faced, while Field was acquitted.
Prosecutors had sought at least 20 years in prison for Daugerdas, a
term his lawyer argued ignored his acquittal on charges that
encompassed much of the case.
"The verdict should make a difference," Henry Mazurek, Daugerdas'
One other Jenkens & Gilchrist partner and five BDO partners pleaded
guilty to related charges.
BDO USA, as the accounting firm is now known, agreed in 2012 to pay
$50 million to resolve related claims. Deutsche Bank separately
agreed in 2010 to pay $553.6 million as part of a non-prosecution
The case is U.S. v. Daugerdas, U.S. District Court, Southern
District of New York, No. 09-cr-00581.
(Editing by Marguerita Choy, Leslie Adler and David Gregorio)
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