[ by Howard Haykin ]

The Deutsche Bank AG banker, 51, was convicted of tax fraud in 2011, and now, in 2013, he stood in a Manhattan federal court room awaiting sentencing.  David Parse, a CPA by training, was found guilty of using his financial and number crunching expertise to help clients hide money in fraudulent tax shelters by engineering transactions to keep their money out of the government’s hands. For his efforts, Parse reportedly earned about $3 million - above and beyond what he earned at his day job as a Registered Rep in the Chicago office of Deutsche Bank Alex. Brown.  He worked there from 1995 through April 2006. 

At his sentencing hearing, Parse to U.S. District Judge William Pauley something about having “tried to live my life … in a proper manner,” but  he readily admitted to “not seeing things for what they truly were.”  The judge responded:  "Unfortunately, it was your selfishness that brought you here today. What were you thinking?  Undoubtedly you thought you'd never get caught."  Then the judge read the sentence:  the CPA-turned-banker would serve 3-1/2 years in prison, spend 3 years of supervised release, and would have to pay over $1 million in restitution to former clients. 

Prosecutors had sought an 8-year prison term, the same sentence imposed earlier this month on Donna Guerin, a former partner at now-defunct law firm Jenkins & Gilchrist, who pleaded guilty in September to conspiracy and tax evasion charges stemming from her role as a marketer and implementer of tax shelters. She was also ordered to pay $190 million in restitution.

The defense sought no prison time, citing his alleged limited role in the scheme.  Paul Schechtman, who represented Parse, said his client would appeal.

The bottom line was that the case presented by federal prosecutors was too strong.  They proved that, from 1994 to 2004, Parse and others defrauded the IRS by designing and marketing bogus tax shelters.  They showed that Parse had earned more than $3 million for his efforts.

Preet Bharara, the U.S. Attorney for the Southern District of New York, issued the following statement:  "David Parse used his professional acumen to help his wealthy clients make an end-run around the IRS, depriving the treasury of billions in tax revenue. And for his role in this sprawling and massive fraud, he is now paying the price."

The case was part of what prosecutors have called "the largest criminal tax fraud in history," resulting in more than $7 billion of fraudulent tax deductions or benefits. 

• Paul Daugerdas, a former colleague of Guerin's at Jenkins & Gilchrist, and former BDO Seidman accounting firm chief executive Denis Field, were found guilty for their roles in the scheme in 2011.
• Last June, Pauley ordered a retrial for Daugerdas, Field and Guerin after he found that a juror had lied during jury selection. 
• Guerin avoided trial after pleading guilty,
• Daugerdas and Field await retrial.
• A fifth defendant was acquitted at the first trial.

The case: U.S. v. Daugerdas et al, U.S. District Court, Southern District of New York, No. 09-00581.
For Parse: Paul Schechtman of Zuckerman Spaeder.
For the government: Nanette Louise David, U.S. Attorney's Office, Southern District of New York.

[Reuters, 2/22/13]