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Leader of BDO 'Wolfpack' brought to bay

March 19, 2009

One of the leaders of the now-defunct "Tax Solutions Group" of national accounting firm BDO Seidman, Adrian Dicker, has pleaded guilty to conspiring to sell fraudulent tax shelters. The group, known as the "WolfPack" within BDO, was involved in a number of prominent tax shelters, including the one in the Jade Trading case. The group worked with law firm Jenkens & Gilchrist and Paul Daugerdas, the law firm's tax shelter maven. From the Justice Department press release:

Dicker and his co-conspirators knew and understood that the clients entering into the tax shelter transactions being marketed and sold with J&G had neither a substantial non-tax business purpose nor a reasonable possibility of earning a profit, given the large amount of fees being charged by the accounting firm and J&G to enter the transaction. Those fees were set by the co-conspirators as a percentage of the tax loss being sought by the tax shelter clients. Dicker also knew that the clients who purchased the tax shelter had no non-tax business reasons for entering into the transactions and their pre-planned steps.

A guilty plea often implies a deal to turn on others. This can't be good news for clients still trying to defend their tax-shelter deals, and it's worse news for others involved in the design and marketing of the shelters.

The TaxProf has a roundup.

Tags: BDO.Jenkens & Gilchrist.Paul Daugerdas.tax shelters.