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November 3, 2011 5:17 PM

Thompson Hine Senior Antitrust Partner Pleads Guilty to Tax Fraud

Posted by Tom Huddleston Jr.

Leslie Jacobs, the senior partner in Thompson Hine's competition, antitrust, and white-collar crime practice group, and a former president of the Ohio State Bar Association, pleaded guilty Wednesday in U.S. district court in Cleveland to a federal charge of tax fraud.

Jacobs, 66, was charged with tax fraud October 13 for underreporting his income from the firm by more than $250,000 between 2004 and 2007. The case against Jacobs was brought by the U.S. Attorney's Office for the Northern District of Ohio; assistant U.S. attorney John Siegel is the lead prosecutor.

As The Am Law Daily reported in October, court filings (PDF) showed Jacobs filed four federal income tax returns between 2004 and 2007 that inflated his business expenses by tens of thousands of dollars to lower the taxable income he collected from his Thompson Hine partnership. Prosecutors said Jacobs's income each year should have ranged from $633,303 to $759,973. Jacobs prepared the returns without the assistance of a professional tax preparer.

Thompson Hine, a 364-lawyer firm based in Cleveland, currently ranks number 141 on The Am Law 200. It had gross revenue of $184 million and profits per partner of $525,000 in 2010, according to the most recent Am Law figures.

Jacobs, who did not respond to a request for comment, is represented in the case by Ulmer & Berne tax partners Frederick Widen and John Goheen, as well as by Brian Downey, Jennifer Schwartz, and Niki Schwartz of the Cleveland firm Schwartz, Downey & Co. Widen declined to comment.

Jacobs is scheduled to be sentenced January 17, according to the court docket. He faces up to 21 months in prison, prosecutors said.

The Plain Dealer of Cleveland first reported news of Jacobs's guilty plea. The Plain Dealer noted in its coverage of Jacobs's Wednesday hearing that Siegel took issue with a letter, dated October 10 that Jacobs sent to friends, colleagues, and clients regarding the charge against him.

Jacobs wrote in the letter, which The Plain Dealer obtained a copy of, that the charge was the culmination of a four-year dispute with the Internal Revenue Service in which, he says, "the levels of hostility and mutual recriminations have escalated in intensity."

"The reason I write now is that I have reached a point where continued debate is pointless," Jacobs wrote, according to The Plain Dealer. Siegel said Wednesday that Jacobs worded the letter in a way that could imply he had done nothing wrong and had pleaded guilty due to coercion, The Plain Dealer reported. Jacobs later told the court that he regretted that his letter had been misunderstood.

"Mr. Jacobs has now admitted, under oath, that he intentionally engaged in criminal misconduct, said Steven M. Dettelbach, the U.S. attorney for the Northern District of Ohio, in a prepared statement. "As for his letter, this case was prosecuted by career public servants who treated this as they treat every case, regardless of the defendant's wealth or profession, in the same professional and unbiased manner. His anger is misdirected if he is blaming the government for all his problems. The bottom line is that everyone must pay their fair share of taxes."

Jacobs has been an attorney at Thompson Hine for 43 years. His practice focuses on antitrust investigations and related civil and criminal litigation, as well as trade secrets, unfair competition, and business torts issues. He also represents Thompson Hine on the international practice committee of the U.S. Law Firm Group. Jacobs was president of the Ohio State Bar from 1986 to 1987, according to the group's Web site.

In October, Thompson Hine issued a statement distancing itself from the matter: "The information that was filed was related to Mr. Jacobs's personal tax returns. It had nothing to do with his work at the firm. The firm was not involved in giving him advice or in preparing his personal tax returns, and we have no further information."

A Thompson Hine spokeswoman confirmed on Thursday that Jacobs remains a partner at the firm.

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