When Illinois car dealer James Auffenberg was indicted for allegedly dodging millions in federal taxes, he turned to the white collar sharpshooters at Zuckerman Spaeder for help. He was acquitted after a two-month trial, avoiding years of potential jail time.
Now, in a lawsuit in the U.S. District Court for the District of Columbia, Zuckerman says its former client still hasn't finished paying his legal bills. His outstanding tab: $834,000.
In March 2007, federal prosecutors accused Auffenberg and four partners of laundering $300 million through a sham company in the U.S. Virgin Islands. The scheme was designed so they could claim a 90% tax exemption meant to promote business development in the territory. It allegedly netted the group $74 million.
According to Zuckerman's complaint, first filed in April, Auffenberg originally hired the firm only to help prep his defense. Eventually, partner Blair Brown entered an appearance to represent him at trial. Among his major credits, Brown helped win an acquittal for the former head of the Salt Lake City Olympic Committee, who had been accused of participating in major bribery scandal.
Auffenberg and his co-defendants were acquitted in March. According to Zuckerman partner Francis Carter, Auffenberg first complained about the firm's charges about a month before closing arguments, nearly a year after it began representing him. Carter says that the firm sent Auffenberg an itemized invoice of charges each month, and that he had been making regular payments to the firm until the end of 2008.
According to Carter, the firm and Auffenberg have met about paying the balance of charges, but those discussions have been "unfruitful." The firm is asking the court for the $834,000, plus interest and damages.
In a counterclaim, filed by Adorno & Yoss partner David Holzworth, Auffenberg alleges that when Zuckerman signed on to represent him at trial, the firm told him it would cost no more than $1.5 million. That's how much he has already paid, Auffenberg says. The additional $834,000 in charges, he says, are unreasonable, and amount to legal malpractice. He is asking the court to set aside the $843,000 and for $500,000 in damages.