Attorney Admits To Tax Dodges

MANHATTAN (CN) - Peter Cinquegrani, formerly an attorney with Arnold & Porter, pleaded guilty Thursday to three federal counts of tax fraud. Cinquegrani admitted charging wealthy clients of the accounting firm Ernst & Young $50,000 to $100,000 to write legal opinions that falsely stated the IRS was "more likely than not" to accept "Personal Investment Corporation" or PICO tax dodges.

The charges stem from Ernst & Young's national tax practice group that originally called itself the VIPER Group (for Value Ideas Produce Extraordinary Results) then changed its name to the Strategic Individual Solutions Group, or SISG. The VIPER/SISG group worked with other financial institutions, law firms and other entities to promote the PICO tax dodge, federal prosecutors said.

Ernst & Young sold 96 fraudulent PICO tax shelters to 150 rich people during 2000 and 2001, prosecutors said. Arnold & Porter attorneys offered them a "more likely than not" opinion letter for fees that "typically ranged between $50,000 and $100,000, depending on the size of the client's PICO transaction," the U.S. Attorney's Office said in a statement. It added: "Cinquegrani was primarily responsible for drafting the legal opinions issued by A&P to E&Y's PICO clients."

Cinquegrani, 48, of Baltimore, will be sentenced on Dec. 11 for conspiracy, tax evasion, and aiding in the submission of false and fraudulent documents.

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