Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Friday, March 29, 2024 | Back issues
Courthouse News Service Courthouse News Service

USA Seizes $123 Million From Ernst & Young

MANHATTAN (CN) - Federal prosecutors seized $123 million in fees that "certain employees [of] Ernst & Young" earned the company by helping rich U.S. citizens duck taxes.

The federal forfeiture complaint states: "During the period between approximately 1999 and 2004, through the conduct of certain employees, Ernst & Young, LLP ('E&Y'), a United States-based international accounting firm, which maintained offices in various United States cities, including New York, New York, assisted high net worth United States citizens in attempting to evade, reduce, and/or defer approximately $2 billion in United States individual income taxes by promoting, implementing, and defending tax shelter transactions, including those sometimes referred to as COBRA, Contingent Deferred Swap ('CDS'), CDS Add-On, and PICO (the 'tax shelters'). E&Y personnel engaged in conduct that was unlawful and fraudulent, including: (i) participating in the implementation of certain fraudulent tax shelter transactions; (ii) assisting in the preparation of false and fraudulent factual recitations, representations, and documents as part of the documentation underlying the tax shelters; and (iii) providing false documents and testimony to the Internal Revenue Service about certain of the tax shelter transactions. As a result of this conduct, E&Y generated fee income of approximately $123,000,000."

Ernst & Young entered a nonprosecution agreement with Uncle Sam on Feb. 28.

The $123 million is sued as defendant in rem.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Loading...