Atty Jailed For $7B Tax Fraud Seeks COVID-19 Release

By Kevin Penton
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Law360 (April 13, 2020, 10:08 PM EDT) -- An ex-Jenkens & Gilchrist lawyer sentenced to 15 years in prison for orchestrating a $7 billion tax fraud scheme wants a New York federal court to allow him to swap a cell for his home because of the novel coronavirus, arguing that to leave him imprisoned amounts to a "death sentence."

Paul Daugerdas on Friday urged the Southern District of New York to allow him to serve what he anticipates will be his remaining seven years of confinement inside his home, saying he is a 69-year-old ex-smoker who suffers from diabetes, high blood pressure and elevated cholesterol.

Daugerdas has been incarcerated since 2014 and expects to be released in July 2027 due to his age, according to a memorandum he filed on Friday with the court. He asserted that converting sentences to home confinement for "elderly inmates seems a lot more practical, cost-effective and humane in a just society" and should not be interpreted as the court going "soft on crime," according to the memorandum.

"Given his age and these medical conditions, we are extremely concerned that when [and not if] the COVID-19 virus spreads through the facility… it may be a death sentence for Mr. Daugerdas," the memorandum said.

Prosecutors claimed Daugerdas created and implemented four tax shelters for wealthy clients that resulted in more than $7 billion worth of fraudulent tax deductions or benefits. He personally reaped $95 million from the scheme, according to the government.

Daugerdas was convicted at trial in 2011, but the verdict was overturned after evidence of juror misconduct emerged. He was tried again in October 2013 and convicted on seven of 16 counts he faced, including conspiracy, tax evasion and mail fraud.

U.S. District Judge William Pauley handed down the sentence in June 2014, saying Daugerdas would be remembered as "the architect of the greatest tax fraud in U.S. history."

"Daugerdas is in a class by himself," the judge said at the time. "He was at the apex of tax shelter fraud racketeers."

Counsel for the parties could not be reached for comment on Monday.

The federal government is represented by Stanley J. Okula Jr. of the U.S. Attorney's Office for the Southern District of New York.

Daugerdas is represented by Henry E. Mazurek and Ilana Haramati of Meister Seelig & Fein LLP.

The case is U.S. v. Daugerdas et al., case number 1:09-cr-00581, in the U.S. District Court for the Southern District of New York.

--Editing by Janice Carter Brown.

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Case Information

Case Title

USA v. Daugerdas et al

Case Number



New York Southern

Nature of Suit


Denise L. Cote

Date Filed

June 09, 2009

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