The Work

October 15, 2008 1:44 PM

Sidley Partner Headed to Trial for Tax Fraud

Posted by Zach Lowe

The last of the original 19 defendants in the botched KPMG tax fraud case are heading to trial today, the New York Times reports.

Among them is Raymond "R.J." Ruble, the ex-Sidley Austin partner who made millions in the tax fraud scam. Here's how: KPMG would create the bogus tax shelters for ultra-wealthy clients, and Ruble would write letters to clients saying the shelters appeared kosher under U.S. law. Those letters were designed to shield clients form any liability.

Ruble wrote about 600 of those letters at the rate of $50,000 a pop from the late 1990s until 2003, when the scheme came to light and Sidley booted him. The firm eventually paid the IRS a $39.4 million civil fine to avoid any criminal charges.

Ruble's lawyer, Jack Hoffinger, has said Ruble is guilty only of "greed."

As the Am Law Daily reported last month, Ruble was only the first Am Law attorney caught in a growing tax fraud scandal; a separate alleged fraud surrounding Ernst & Young has already ensnared former Arnold & Porter partner Peter Cinquegrani. 

Several sources close to the investigation told the Am Law Daily last month they expect more indictments of lawyers. Candidates include Paul Daugerdas, a former partner at the defunct Jenkens & Gilchrist who brought in hundreds of millions of dollars in fees by approving bogus shelters, and R. Brent Clifton, a current Locke, Lord, Bissell & Liddell partner who got the firm involved in the Ernst tax shelter business in 1999.

The Am Law Daily will have more on Ruble's trial as it proceeds.

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