Two ex-BDO vice chairmen get prison for tax shelter scheme

Reuters

By Nate Raymond

NEW YORK (Reuters) - Two former vice chairmen of accounting firm BDO Seidman were sentenced to prison on Monday after pleading guilty to engaging in a conspiracy to defraud the United States through the promotion of tax shelters.

Charles Bee was sentenced 1-1/3 years while Adrian Dicker received 10 months, in separate hearings before U.S. District Judge William Pauley in New York.

They were also ordered, together with other co-conspirators in the case, to make more than $69 million in restitution to the Internal Revenue Service.

Both men had pleaded guilty in 2009 to charges stemming from their roles in what the government called a tax shelter scheme involving BDO and the law firm Jenkens & Gilchrist. The scheme generated $6.5 billion in bogus losses, prosecutors said.

BDO USA, as the accounting firm is now known, agreed in June 2012 to pay $50 million to resolve related government claims through a deferred prosecution agreement.

Bee, 68, and Dicker, 59, were two of five BDO partners or employees to plead guilty. Another former partner, Robert Greisman, is scheduled to be sentenced Tuesday after reaching his own plea deal in 2009.

Bee and Dicker had cooperated with authorities, as did Greisman, and lawyers for both men had sought probation in light of their help.

"I shamed myself," Bee said in court on Monday.

But Pauley said defendants should not be led to believe they can escape prison by cooperating with prosecutors, even if their help were to proved crucial in complex cases.

"If everybody gets the message, 'Yes, if the government comes knocking at my door, all I have to do is roll over,' that sends the wrong message too," Pauley said.

Bee pleaded guilty to charges of conspiracy to defraud the Internal Revenue Service, tax evasion and perjury. Dicker pleaded guilty to conspiracy and tax evasion charges.

Both men testified in two trials against former BDO Chief Executive Denis Field. Jurors convicted Field in 2011, but the defendant won a retrial and was acquitted in October 2013.

Another defendant, former Jenkens & Gilchrist partner Paul Daugerdas, was convicted on seven of 16 counts he faced, including conspiracy, tax evasion and mail fraud. He is scheduled to be sentenced on June 25.

The probe helped bring down Jenkens & Gilchrist, a 600-lawyer Dallas-based firm that dissolved in 2007 after agreeing to pay a $76 million penalty to the IRS. Daugerdas had overseen its Chicago office.

The cases in U.S. District Court, Southern District of New York, are U.S. v. Bee, No. 09-cr-00545, and U.S. v. Dicker, No. 09-cr-00238.

(Reporting by Nate Raymond in New York; Editing by Tom Brown)

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