NEW YORK (AP) — A Chicago-area lawyer and accountant labeled by the government as history’s most prolific and unrepentant tax cheat was sentenced Wednesday to 15 years in prison, and the judge bemoaned the “incredible greed” of some of America’s wealthiest people for taking advantage of the tax shelters he peddled.
The lawyer, Paul M. Daugerdas, 63, was ordered to pay nearly a half-billion dollars in restitution and forfeit $164 million in cash and property, including a lakefront Wisconsin home, after he was convicted at trial last year of conspiracy, tax evasion and mail fraud. He must report to prison Sept. 18.
Daugerdas, of Wilmette, Illinois, did not speak at sentencing. Outside court, he said he was “profoundly disappointed” and it was a “sad day” for the criminal justice system.
Daugerdas earned more than $95 million as the architect of a fraud from 1994 to 2004 that relied on sophisticated and illegal tax shelters to shield some of the country’s richest people from paying taxes on nearly $8 billion in gains, said U.S. District Judge William H. Pauley III. The government lost $1.6 billion in tax revenues as a result, including $32 million owed by Daugerdas, who used his tax shelters to claim he owed only $8,000 in taxes, prosecutors said.
“This case shows the astonishing lengths some super-wealthy Americans will go to avoid their obligation as citizens,” the judge said. “Mr. Daugerdas was a tax shelter racketeer who tapped into the incredible greed of some of the super-wealthy who didn’t want to contribute to the nation whose freedom made their huge financial successes possible.”
He added that Daugerdas found “willing customers in a sordid crowd of real estate tycoons, tire magnates, software developers, many others. None of them cared one whit about lying to the government.”
And he said the charismatic Daugerdas found it easy to corrupt attorneys, accountants and financial advisers as he involved some of the country’s largest financial institutions and accounting firms.
“The success of the scheme depended on the unethical and criminal behavior of highly educated and highly compensated professionals,” the judge said.
Prosecutors said Daugerdas helped create tax shelters for investors including the late sports entrepreneur Lamar Hunt, trust fund recipients, inventors, a grandson of the late industrialist Armand Hammer, real estate moguls and one of the earliest investors in Microsoft Corp.
Daugerdas was acquitted of nine charges, and the judge cited them in rejecting the 20-year term recommended by prosecutors, who called him the mastermind of the largest tax fraud in U.S. history.
Daugerdas is a former head of the Chicago office of a once prestigious Texas-based law firm, Jenkens & Gilchrist. The judge noted that the firm, with 600 attorneys and offices around the country, “collapsed under the weight of his criminal acts.”
After Daugerdas was convicted three years ago, the judge ordered a new trial because a corrupt juror had spoiled the verdict. The judge scolded prosecutors for failing to bring criminal charges against the juror.
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This Week’s Celebrity Instagrams (11/26-12/2)
30 photos Launch gallery
1. Little Legend and Puddy 😍😍😍😍
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2. "You on point Phife?" "all the time,Tip". 💥 #bannedfromnormal
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3. Vegan! The Impossible burger at Crossroads
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4. Lawrence #BeforeandAfterEpisodes 1-4: 184lbs 13% body fatEpisode 8: 196lbs 8% body fat S/O @coachdaveboxing with the works outs and @kildareriordan with the nutrition
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5. Jus haaaanngin out
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6. Meanwhile back at home in Atlanta GA someone mad they not on the 🛳. 😳
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7. No limits... Photo cred: Chris Bridges @ludacris
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8. new new
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9. Apparently my 260lbs is too much for the actual vines in the Hawaiian jungles to hold me without breaking and me falling hundreds of feet. So for safety purposes, I'm forced to swing thru #Jumanjj on wires strong enough to hold 12 adult buffaloes and 1 adult Rock. #OnSet #Jumanji #IronicallyIEatBuffaloDailyForLunch #MoreManThanNatureKnowsWhatToDoWith
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10. hey ma! 🎎#wcw 💙
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11. Surprise visit to our factories!!! #GoodAmerican #USA
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13. Peachy Keen 🔥✨⚡️
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14. If this don't look thankful I don't know what does. Happy Thanksgiving to you and yours. #UltraBlessed #24kMagic #SweetPotatoFly
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15. Late nights @nbcmarlon with the writers... we in here!!!
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16. There goes my baaaaaaaaabbbbyyyyy #QueenKingMagic!!! We're up to something! Ira BIG!!! Stay out our buisness -
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17. You want to win every game you play but when you come home to these faces... who cares. #ILoveYouGirls best part of my day, everyday!
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18. Steady,steady..... full size jenga.. "I got this one "???? Or do I ?
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19. Cornrows kind of day 😉@dontaysavoy2 you convinced me and I love. ❤️️
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20. #BrotherlyLove #tbt
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22. #basel #TeamLOVE @kingcombs
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23. Just introduced a special screening of @directher 's groundbreaking (must see) documentary @13thfilm with my brother @themichaelealy | @unitedblackout #blackoutblackfriday
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24. Me & Vanessa Williams giving #DuckLips #Pose on the set of #DaytimeDivas @vh1 - Coming Soon to a tv near you. Lol. - My make up done by @makeupsurgeon
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25. This picture just makes me wanna praise the Lord, you hear me!!!!!! Yes Lord brotha #TEDDYCAMPBELL What a #man !!! You are everything right on this picture husband ......... #gorgeous #stylish #classy #strong #masculine #king #sexy #debonair #gentlemenstyle And that #bible in your hand just seals the deal for me (probably cause i know that, that is what helped you become just as amazing as you look😘). While my heart and mind experiences the goodness of God at #church on Sundays, my eyes experiences the goodness of Teddy😍. Amen somebody🙌🏽. "Bless the Lord oh my soul and all that is within me bless his holy name" #myman #myhusband #goodman #blackman #dapperman #godlyman #goodfather #mybestfriend
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26. Yesterday was my mama's 53rd birthday!!!!! Got to celebrate with her all day. If this is what I have to look forward to I can't wait. Looking like a soft bucket a cocoa butter. Yaaaaaaaaaas! 😍😍😍 love you mommy!
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27. "Shout out to @PureAtlanta for getting the family right"....I'm loving this jogger. 😍😍
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28. This pic warms my heart ❤️ #myLogiebeans and aunt aunt umba @itowandabraxton 😘
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29. You will always be my baby😜. #HappyBirthdayReginae #mybaby18
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30. GC "Gods Child" Red on Red SweatSuit available now at www.MonicaApparel.com ... Take Your Crown wherever you go!! I'm pictured in a Medium... Go to the site now for other options ... cc: @trukernell
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