Ex-Lawyer Donna Guerin Pleads Guilty in Tax-Shelter Case

Donna Guerin, a former partner in the defunct law firm Jenkens & Gilchrist, pleaded guilty in what the trial judge has called the biggest U.S. tax-fraud prosecution in history.

Guerin was initially convicted by a jury in May 2011 with three other defendants of running a 10-year tax shelter scheme that created more than $1 billion in phony losses. Three of the convictions, including Guerin’s, were overturned in June after U.S. District Judge William Pauley found that a juror in the case lied about her past, including that she was an alcoholic and a suspended attorney.

Guerin, 52, pleaded guilty today in Manhattan federal court to one count of conspiracy and one count of tax evasion. Her plea comes as prosecutors are preparing to retry the defendants whose convictions were overturned based on the misconduct of the juror, Catherine Conrad.

“I came to believe that many clients engaged in the transactions solely because they wanted to eliminate or reduce tax liability,” she said today in court.

She faces a maximum of 10 years in prison on both counts, the judge said during the hearing. Sentencing is scheduled for Jan. 11. She has agreed to pay $1.6 million in penalties.

Her defense lawyer, Mark Rotert, declined to comment after the proceeding.

Tax Shelters

Guerin said today she worked on tax shelters with Paul Daugerdas, also a defendant in the case, while the two were lawyers at former Chicago-based firm Altheimer & Gray. The two joined Dallas-based Jenkens & Gilchrist in 1998, she said, and continued their work in helping clients shelter income.

Guerin admitted to helping advise clients on how to conduct complex transactions that allowed them to wipe out financial gains. Guerin said she also provided opinion letters to her clients helping them assert that the deals were legitimate.

The jury, including Conrad, returned guilty verdicts on May 24, 2011, against Guerin and Daugerdas; Denis Field, the former chief executive officer at accounting firm BDO Seidman LLP; and David Parse, who worked for Deutsche Bank AG unit Alex. Brown. Craig Brubaker, a second former Alex. Brown accountant, was found not guilty.

Pauley threw out the convictions of Guerin, Daugerdas and Field after finding that Conrad, Juror No. 1 in the trial, had lied repeatedly about her background in an effort to make herself “more marketable” as a juror.

New Trial

Pauley, who found that Parse’s lawyers failed to reveal information they had about Conrad before the jury delivered its verdict, refused to grant him a new trial. Parse is seeking to overturn his conviction by claiming his lawyers, from the New York firm Brune & Richard LLP, provided him with inadequate legal help.

The 10-week trial included 9,200 pages of testimony from 41 witnesses. Lawyers introduced 1,300 pieces of evidence.

The case is U.S. v. Daugerdas, 09-CR-581, U.S. District Court, Southern District of New York (Manhattan).

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