Readmission Impossible

An attorney convicted in a tax shelter scheme was permanently disbarred by the Louisiana Supreme Court.

The underlying facts of the Third Superseding Indictment are complex, but essentially, the Government alleged that respondent’s criminal conduct occurred as part of an effort to market, sell, and implement a tax shelter known as “Hedge Option Monetization of Economic Remainder,” or HOMER, which respondent designed for high net worth clients of Bank One. Respondent, who is also a CPA, allegedly prepared fraudulent invoices to obtain referral fees from Bank One on the transactions relating to this tax shelter, although he was not entitled to receive the fees, and then concealed the receipt of the ill-gotten referral fees by failing to report them on his individual tax returns. Furthermore, the Government alleged that respondent embezzled at least $3 million dollars from a client’s trust account and willfully evaded taxes on approximately $6.5 million in income in 2001 and 2002.

On June 2, 2010, following a three-week trial, the jury found respondent guilty of all three counts of the Third Superseding Indictment. In response to a special interrogatory, the jury found that the Government had proven respondent’s guilt with respect to both alleged objects of the Count One conspiracy.

The conviction was affirmed and is presently under collateral attack.

As to sanction

The record reveals that respondent orchestrated a complex scheme in which he stole money from a client’s trust, then stole fees from Bank One that would not otherwise have gone to him, and finally avoided paying federal income taxes on the monies so obtained. See United States v. Ohle, 441 Fed. Appx. 798, 800, 2011 WL 4978442 (2nd Cir. 2011). Without a doubt, such conduct reveals a fundamental lack of honesty and integrity in respondent’s character which makes him unfit to hold a license to practice law in this state.

We do not impose permanent disbarment lightly. In re: Morphis, 01-2803 (La. 12/4/02), 831 So. 2d 934. However, in light of the undisputed facts of this case, we can conceive of no circumstances under which we would ever allow respondent to be readmitted to the practice of law in Louisiana. He must be permanently disbarred.

(Mike Frisch)