Chicago lawyer convicted in NY for his role in 10-year tax fraud; co-defendant acquitted

NEW YORK, N.Y. - A Chicago lawyer and certified public accountant was convicted Friday for his role in a 10-year tax fraud that generated $7 billion in phoney tax losses, a scheme authorities have called the largest tax fraud in history.

Paul Daugerdas, the 63-year-old former head of the Chicago office of the now defunct Texas-based law firm Jenkens

Daugerdas, of Wilmette, Ill., faces up to 58 years in prison when sentenced next March. His lawyer didn't return messages seeking comment. A co-defendant at trial was acquitted of all charges.

The tax shelters, prosecutors said, were marketed from 1994 through 2004 to the wealthy and well-connected, including the late sports entrepreneur Lamar Hunt, trust fund recipients, investors, a grandson of the late industrialist Armand Hammer and a man who was one of the earliest investors in Microsoft Corp.

Others have been convicted in connection with the scheme. In March, a former attorney in the law firm was sentenced to eight years in prison and was ordered to pay $190 million in restitution.

Daugerdas made $95 million in fees from creating and marketing tax shelters for wealthy clients but paid less than $8,000 in taxes when he owed more than $32 million, prosecutors said.