By Michael Foster, Big4.com Blogger
In May 2009, two former partners with Big4 firm Ernst & Young were convicted of tax evasion and conspiracy after a ten-week trial. Now, those convictions have been overturned by a federal appeals court.
The two-to-one vote found former tax lawyers Martin Nissenbaum and Richard Shapiro not guilty of the charges that they were previously convicted of. While Nissenbaum faced a 30 month prison sentence, Shapiro was facing 28 months, although both men were free on bail during the trials.
The alleged fraud supposedly cost the government $2 billion in lost revenue, prosecutors said, as the two conspired to help high net worth individuals with over $10 million in total assets create paper losses or find ways to be taxed at the capital gains rate instead of at the ordinary income rate.
Ernst & Young had cooperated with authorities during the investigation and was not charged with an infraction. Nissenbaum were also accused of obstructing the IRS in its investigation. Nissenbaum’s lawyer, Nathan Lewin, said that he was grateful for the reverse of his client’s conviction.
Richard Shapiro’s lawyer said that her client was “thrilled that the court reached the right and just result” after the majority opinion concluded that the prosecution and conviction were unwarranted.
Three other men were also charged in the case and remained convicted of their crimes.