The government’s criminal case against promoters of questionable tax shelters took a step forward yesterday when an investment adviser at the center of the inquiry pleaded guilty and provided new details on those involved.
The plea by David Amir Makov, 41, in Federal District Court in Manhattan is expected to bolster the government’s investigation of Deutsche Bank over its work with questionable shelters, including one known as Blips, whose workings Mr. Makov described in detail yesterday.
No charges have been filed against Deutsche Bank, and it was not named in court documents yesterday. In a statement that he read yesterday, Mr. Makov described his tax shelter work with Bank A, which people close to the case have identified as Deutsche Bank. A spokesman for the bank declined to comment.
Mr. Makov’s plea is also expected to help the government’s case against the four remaining defendants, who include three former employees of the accounting firm KPMG and an outside lawyer. Those four are scheduled to go to trial in October.
As part of the plea agreement, Mr. Makov agreed to pay a $10 million penalty; he will be sentenced at a later date. His lawyers declined to comment yesterday.
His guilty plea to conspiracy to commit tax evasion puts back on track a faltering case that had become, to the consternation of prosecutors, a referendum on the constitutional rights of white-collar defendants, rather than the largest criminal inquiry ever into abusive tax shelters.
The turning point came in July, when Judge Lewis A. Kaplan of Federal District Court in Manhattan dismissed criminal charges against 13 of the 18 defendants, all but 2 of them former KPMG employees. The judge also accused prosecutors of violating the rights of the defendants by pressuring KPMG to cut off payment of their legal fees. The government is appealing that ruling.