Opens in a new tab

Tax Cheat Rap Sheet:
Week ending June 1, 2007

June 3, 2007

Criminal_2_2 For this week’s look at tax cheats, we’re going with just two cases because this weekend has turned out to be just as overloaded as Monday through Friday was.

But I think you’ll find each instance ranks quite high in the "you’ve got to be kidding" category.

First, we have another big accounting firm involved with bogus tax shelters, a la KPMG and Jenkens & Gilchrist. So what, you say?

Here’s what: Federal prosecutors say one of the illegal shelters devised by Ernst & Young employees used the Sept. 11 terrorist attacks as the basis to cheat the government of hundreds of millions of tax dollars.

Martin Nissenbaum, Richard Shapiro, Robert Coplan and Brian Vaughan were indicted by a New York-based federal grand jury last week. They allegedly set up illegal shelters for E&Y clients with taxable income generally in excess of $10-to-$20 million in order to eliminate or reduce federal taxes.

Prosecutors say the employees, two of whom no longer work for E&Y, created "false and fraudulent factual
scenarios" such as the World Trade Center attacks, which sent the value
of investments plunging.

After obtaining the shelters’ tax benefits, according to the indictment, some of the clients terminated their trading partnerships using a letter devised by one of the defendants in which "clients falsely attributed their decision to discontinue their trading activities to the Sept. 11, 2001, terrorist attacks and to ‘possible economic repercussions resulting from such attacks.’"

Not that you expect decorum and class when it comes to tax cheating, but using 9/11 is particularly distasteful.

‘Poor pitiful me:’ For our second tax crime this week, we turn to a Florida woman who finally has to pay, sort of, for stiffing Uncle Sam of more than $3 million.

Mary Ham was convicted in January, along with her boyfriend, for refusing to pay $3.6 million in taxes, interest and penalties. Last week, she was sentenced to two years in federal prison. That was less than half the recommended jail time.

Apparently, the judge bought Ham’s tearful argument that she "allowed dominant men in [her] life to be in control." Yeah, that and dominant greed.

Ham and her co-defendant in the case, Fred Suttles, owned Diamond Brokers of Northwest
Florida. He also is the father of her younger daughter. In April, the same judge sentenced Suttles to
14 years.

At least Ham also got three years of supervised release after her prison term and was fined a <cough> whopping <cough> $10,000.

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
Tax policy possibilities under a coming Democratic Congress

November 4, 2026

Thanks to Nov. 3 midterm election wins Democrats will control both the House and Senate…

Read More
TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • Referring to allegations of tax fraud as “tax crimes”, and referring to them as “tax cheating” and “distasteful” is un-American, since allegations are only allegations. The government has been piling on for awhile, as the softening of the Kpmg tax “fraud” case indicates. Furthermore, those writing about such matters rarely understand much about the actual facts and transactions underneath, and thus understand little of the merits (or lack thereof) of the government’s allegations. My advice is to be more skeptical of allegations, less cynical towards those who muct defend themselves against them, more respectful of the rights of honest taxpayers to minimize their tax burdens, and stop with the contempt prior to investigation.

Leave your comment