CLEARWATER, Fla. (CN) – Attorney Jay I. Gordon of the law firm Greenberg Traurig LLP received kickbacks in exchange for steering clients to tax shelters, leaving one couple who relied on his advice with a debt to the IRS of more than $13.8 million, Stephen and Dana Hansel claim in Pinellas County Court.
The couple claim they suffered “damages in the millions of dollars” due to Gordon and the firm’s legal malpractice and breaches of fiduciary duty.
The scheme unfolded after Stephen Hansel decided to donate part of his investment earnings to his alma mater, Wesleyan University. To implement the plan, he set up a Florida trust and began making foreign currency transactions with Montgomery Global Advisors.
Looking for tax advice on this investment strategy, the Hansels say they were led to Gordon under the false assertion that his advice was “the gold standard” of tax opinions.
Gordon’s 88-page opinion letter stated, in part, that some of the Hansels’ investment transactions were not taxable, the lawsuit claims.
The couple say they relied on this advice in claiming losses of more than $22 million on their 2002 federal income tax return.
The firm failed to mention that, according to an internal investigation, Gordon had previously received $1.3 million in kickbacks for steering clients to tax shelters, the lawsuit claims.
As a result, the IRS determined that the Hansels owed more than $13.8 million in back taxes, fees and penalties.
The plaintiffs say Gordon and the firm should be liable for that amount, as the couple relied on their misrepresentations.
The Hansels are represented by Peterson & Myers of Lakeland, Fla.