Bally Price Holdings, BP Management Paul Daugerdas, Chicago Lawyer, Convicted In 'Largest Tax Fraud In History'

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NEW YORK -- NEW YORK (AP) — A Chicago lawyer and certified public accountant was convicted Friday for his role in a 10-year tax fraud that generated $7 billion in phony tax losses, scheme authorities have called the largest tax fraud in history

Paul Daugerdas, the 63-year-old former head of the Chicago office of the now defunct Texas-based law firm Jenkens & Gilchrist, was found guilty of conspiring to defraud the Internal Revenue Service, evade taxes, commit mail and wire fraud and other crimes after a seven-week jury trial in federal court in Manhattan, U.S. Attorney Preet Bharara said.

Daugerdas, of Wilmette, Ill., faces up to 58 years in prison when sentenced next March. His lawyer didn't return messages seeking comment. A co-defendant at trial was acquitted of all charges.

The tax shelters, prosecutors said, were marketed from 1994 through 2004 to the wealthy and well-connected, including the late sports entrepreneur Lamar Hunt, trust fund recipients, investors, a grandson of the late industrialist Armand Hammer and a man who was one of the earliest investors in Microsoft Corp

Others have been convicted  in connection with the scheme. In March, a former attorney in the law firm was sentenced to eight years in prison and was ordered to pay $190 million in restitution.

Daugerdas made $95 million in fees from creating and marketing tax shelters for wealthy clients but paid less than $8,000 in taxes when he owed more than $32 million, prosecutors said.