Free Motion to Stay - District Court of Federal Claims - federal

Case 1:05-cv-00999-MMS Document 10-11 U.S. Department of Justice

Filed 01/13/2006

Page 1 of 2

United States Attorney
Southern District of

New York

The Silvio J. Mollo Building One Saint Andrew's Plaza New York, New York 10007

January 13, 2006

VIA FEDERAL EXPRESS
David Gustafson, Esq. Acting Chief Court of Federal Claims Section

Uni ted States Department of Justice Tax Division
555 4th Street, N.W.

Building JCB Room 8804 Washington, D.C. 20001

Re: Epsolon Limited v. United States
Fedl. Cl. No. 05-999

Dear Mr. Gustafson:
I write on behalf of the United States Attorney's Office for the Southern District of New York ("the OfficeU) to confirm our prior requests that 'you seek a stay in the above referenced case pending before the Court of Federal Claims. On October 17, 2005, the Grand Jury filed United States v. Stein, et ai., Superseding Indictment No. S1 05 Cr. 588 (LAK) which charges 19 individuals

wi th a conspiracy to defraud the IRS in connection with

designing, marketing and implementing fraudulent tax shelters, including shelters known at KPMG as FLIP, OPIS, BLIPS and SOS and its variants. The Keith A. and Laura B. Tucker/Epsolon tax shelter which is at issue in this civil case is a shelter which KPMG referred to as an SOS shelter, and the specific Tucker/Epsolon transaction is encompassed in the charges in the the Stein Indictment. See, inter alia, Indictment paragraphs 32,47-51. As you know from documents in possession of IRS-civil, this shelter was marketed by KPMG to the Tuckers, largely through the efforts of tax partner Timothy Speiss, and the opinion letters were authored by Raymond J. Ruble, a defendant in the Stein criminal case. The boutique tax shelter promoter and its principle owner who are also involved in th~ Epsolon/Tucker

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- EXHIBIT z

Case 1:05-cv-00999-MMS

Document 10-11

Filed 01/13/2006

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David Gustafson, Esq.

January 13 i 2006

shel ter, have both been criminally referred by the IRS and Tax Division to this Office for investigation, and are under active investigation. The indictment also charges that individuals at KPMG defrauded the IRS and obstructed the due administration of the Internal Revenue Laws by intentionally concealing from the IRS the nature and scope of KPMG's involvement with KPMG SOS

transactions.

The Hon. Lewis A. Kaplan has set trial for September 11, 2006. An earlier May 1, 2006 trial date was changed to accommodate the trial schedule of an attorney for one of the defendants added in the Superseder. All parties indicated their availabili ty for the September trial date and the Judge has stated that this is a firm date which will not be changed.

wi thstand an IRS challenge i KPMG's decision nevertheless to
market SOS she

Because this pending Court of Federal Claims case involves transactions that are specifically encompassed in the Stein indictment, we strongly believe that permitting this case to move forward would jeopardize and interfere with the Stein trial and the ongoing criminal investigation. The facts and issues relevant to both the criminal and civil proceedings include, among others, KMPG's review and evaluation of the SOS shelter and Ruble's opinion letter and its determination that neither would

I ters to taxpayers including the Tuckers and to

prepare tax returns encompassing purported SOS losses i KPMG's actual marketing of the shelter to the Tuckers ¡Ruble's opinion letter and the veracity of the representations contained therein made by among others the taxpayers i and the role of the shelter boutique, its principle owner and related parties in implementing the Tucker shelter. Therefore we respectfully request that you seek a stay in this case until the conclusion of the Stein trial and any related sentencing proceedings.

Thank you very much for your consideration of this request.

Very truly yours,

MICHAEL J. GARCIA UNITED STATES ATTORNEY
BY:

s.irah Neiman CHIEF COUNSEL TO THE UNITED STATES ATTORNEY

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