Justice Department lawyers today filed suit against a former Seyfarth Shaw partner in Chicago whose promotion of tax shelters using Brazilian debt allegedly created hundreds of millions of dollars in fake tax deductions for clients in the United States.
The 74-page civil suit, filed in Chicago federal district court, names tax attorney John Rogers and two of his companies, Sugarloaf Fund and Jetstream Business Limited, as defendants. The suit claims that Rogers, since at least 2003, created “abusive tax avoidance schemes” that used distressed asset debt tax shelters and distressed asset trust tax shelters.
DOJ Tax Division trial attorneys Gregory Seador and Nathan Clukey said in the complaint that Rogers’ schemes enabled U.S. customers to use millions of dollars in foreign losses to offset unrelated income in the United States even though the clients did not suffer any actual foreign loss. DOJ lawyers said the schemes have generated more than $370 million in fictitious tax deductions.
Based on his education and experience, Rogers should have known his schemes were “abusive and illegal when he created them,” according to the suit. The government’s complaint is here.
A message left with Rogers’ law firm, Rogers & Associates in Chicago, was not immediately returned this afternoon. Rogers did not immediately respond to an e-mail seeking comment about the suit. A Seyfarth Shaw spokesman in New York declined to comment on the case.
Rogers was a partner in the law office of Altheimer & Gray from 1998 until 2003, when the firm went bankrupt, according to the suit. That year, Rogers joined Seyfarth’s Chicago office as a non-equity partner. Rogers became an equity partner in 2004 and stayed with the firm until his forced resignation in 2008, court records show.
DOJ officials said Rogers told Seyfarth Shaw that the Internal Revenue Service was investigating him and that he would stop the promotion of the two tax shelters. Rogers, according to DOJ, continued to promote the trust shelter, concealing his activity from the firm.
Seyfarth Shaw later discovered the alleged deception and required Rogers to resign, according to the complaint.