E&Y Partners Convicted of Fraud

Four current and former partners of the Big Four firm Ernst & Young were found guilty yesterday of fraud involving tax shelters that helped wealthy people evade income taxes.

Convicted were:

• ROBERT COPLAN, 54, of Plano, Texas, a former E&Y tax partner, and the former national director of E&Y’s Center for Wealth Planning. Coplan, a lawyer, was at one time a branch chief in the IRS’ Legislation and Regulations Division.
• MARTIN NISSENBAUM, 51, of Brooklyn, New York, an E&Y
  partner, lawyer and the national director of E&Y's Personal Income Tax and
  Retirement Planning practice.
• RICHARD SHAPIRO, 58, of Rye Brook, New York, an E&Y tax partner and lawyer.
• BRIAN VAUGHN, 39, of Calhoun, Louisiana, a former E&Y tax partner and CPA.

Federal prosecutors charged the four in May 2007, claiming that from 1998 to 2006 they defrauded the IRS by creating, marketing, using and defending tax shelters.The shelters were meant to help people with taxable incomes of more than $10 million avoid or reduce income taxes, according to the indictment.

"The defendants and their co-conspirators understood that if the IRS were to detect their clients' use of these tax shelters, and learn the true facts and circumstances surrounding the design, marketing and implementation of the shelters, the IRS would aggressively challenge the claimed tax benefits," the indictment states.

The jury in United States District Court in Manhattan returned the verdict of guilty on all counts after a two-month trial.