Ernst & Young partners charged with tax fraud

Mumbai: US federal prosecutors have charged two current and two former partners of accounting firm Ernst & Young with tax fraud conspiracy in the sale of tax shelters.

The two, who pleaded not guilty at US District court in Manhattan, are accused of creating and marketing tax shelters at the "Big Four" accounting firm from 1998 through 2004 based on fraudulent scenarios that allowed wealthy individuals to reduce the federal taxes they would have to pay.

The indictment followed years of investigations into the sale of aggressive tax shelter strategies.

Sixteen former partners at rival "Big Four" firm KPMG are also facing trial in September.

The four men accused include Robert Coplan, former National Director of Ernst & Young's Center for Family Wealth Planning; Martin Nissenbaum, the firm's former national director of Personal Income Tax and Retirement Planning; former Ernst & Young partner Richard Shapiro and Brian Vaughn, a former senior manager at the firm.

US District Judge Sidney Stein, Copland, Shapiro and Nissenbaum were released on $1 million bail with travel restrictions, while Vaughn was released on $300,000 bail with travel restrictions.

If convicted of the charges, Coplan, 54, could face 18 years in prison; Nissenbaum, 51, could serve as many as 13 years, while Shapiro, 58, and Vaughn, 39, could each face 10.