BDO Admits Generating $6.5 Billion In Phony Tax Shelter Losses, Pays $50 Million

[NNN0LHI]

http://www.forbes.com/sites/janetnovack/2012/06/13/bdo-admits-generating-6-5-billion-in-phony-tax-shelter-losses-pays-50-million/

6/13/2012 @ 7:28PM

Accounting firm BDO USA has admitted it was part of a fraud that generated $6.5 billion in phony tax losses and has agreed to pay $50 million to settle a federal investigation into its promotion of abusive tax shelters from 1997 to 2003. As part of a deferred prosecution agreement with BDO announced today, U.S. Attorney for the Southern District of New York Preet Bharara filed a tax fraud conspiracy charge against the firm, but will move to have that charge dismissed this coming December, provided BDO continues to cooperate in his criminal investigation and meets certain other conditions. Chicago-based BDO, formerly known as BDO Seidman, is the seventh largest accounting firm in the United States.

BDO’s settlement comes nearly seven years after KPMG agreed to pay a $456 million fine in a deferred prosecution deal covering its role in promoting similar over-the-edge tax shelters. Since then, a procession of other big name participants in the frenzied shelter market of the late 1990s and early 2000s have settled up, with Deutsche Bank agreeing to pay a record $554 million in a deferred prosecution deal in 2010. (Deferred prosecution, also known as pretrial diversion, has become the feds’ preferred method of dealing with wrongdoing by prominent corporations since the Department of Justice came under fire for causing the 2002 collapse of accounting firm Arthur Andersen, which was convicted of obstruction of justice in the Enron scandal.)

[Historic NY]

1. Sounds like they are getting off cheap.

[KoKo]

2. Thanks...another "settlement" ...no prosecution. Sad ...no Prosecution...no reason

not to keep doing it over and over and allowing others to get the same idea. "Pay a fine...and carry on...get caught...Pay the Fine and carry on.