LOS ANGELES (CN) – SBP Capital claims Deloitte & Touche cost it $100 million by giving it bum advice on “tax issues related to Ameriquest’s securitizations” of mortgage lending and “related activities.”
According to the Superior Court complaint: “(F)rom at least 1999 through 205, Deloitte improperly prepared Ameriquest’s tax returns and provided erroneous advice with respect to Ameriquest’s securitizations. Deloitte prepared tax returns that failed to report hundreds of millions of dollars in taxable ‘excess inclusion income’ that was imputed to Ameriquest under the tax laws, although it received no cash or other economic benefit related to this ‘phantom income.'”
The complaint by SBP, formerly known as Ameriquest Capital, says, Deloitte exposed the company to tens of millions of dollars or more in taxes, interest and potential penalties.
“This phantom income and resulting exposure to tax, interest and potential penalties would have been avoided if Deloitte had properly prepared the Ameriquest tax returns or properly advised Ameriquest of the tax consequences associated with the securitization structure,” said the complaint.
“As a result of Deloitte’s actions, Ameriquest entered into a consent agreement with the IRS in October 2009, which requires Ameriquest to recognize almost $100 million in additional income through the 2007 tax year, and tens of millions of dollars in additional income for the 2008 through 2010 tax years. Pursuant to the consent agreement, Ameriquest and its shareholders will be liable for tens of millions of dollars in taxes, interest and potential penalties. The precise amount of such taxes and interest is currently being determined by the IRS.”
Ameriquest demands $100 million in damages of each of four causes of action: professional negligence, negligent misrepresentation, breach of contract, and breach of fiduciary duty. It is represented by Laura Lindgren with Hennigan Dorman.