Free Joint Status Report - District Court of Federal Claims - federal

Case 1:05-cv-00299-EJD

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Filed 06/16/2008

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ____________ No. 05-299 T (Chief Judge Edward J. Damich) (Consolidated with: No. 05-300 T, No. 05-301 T, No. 05-302 T, No. 05-303 T) INSTASHRED SECURITY SERVICES, LLC, by and through ISS ACQUISITIONS, LLC, a Partner Other Than the Tax Matters Partner Plaintiff, v.

THE UNITED STATES, Defendant. ______________ JOINT STATUS REPORT ______________ Pursuant to the Court's order of March 26, 2008, the parties hereby provide this Joint Status Report and request that the Court continue the stay of proceedings in this action. The criminal proceedings in the Southern District of New York led the Court to stay this case in October 2005. United States v. Stein, et. al. (No. S1 05 Cr 888, S.D.N.Y.). The dismissal of 13 defendants in the Stein case is on appeal. Briefing and oral argument for the appeal is completed. The four remaining defendants are scheduled for trial in September 2008, pursuant to a November 16, 2007, order of the district court. David Greenberg, a former KPMG partner, remains a defendant in the Stein criminal proceeding. His trial will commence in September 2008. The government alleges that Greenberg was a promoter of a tax shelter that is at issue in this case. A superseding indictment was issued against him on November 9, 2007 (No. SR4 05 Cr. 888, S.D.N.Y.) -1Continuing the
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Case 1:05-cv-00299-EJD

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stay of these proceedings will prevent harm to the criminal prosecution and permit the United States the opportunity to mount a full and complete defense in this case unencumbered by claims of Fifth Amendment privileges. A continuance may also provide access to additional relevant information once the criminal proceedings are concluded. The plaintiffs here submitted a revised offer on February 20, 2008, to settle all the issues in these consolidated cases and for subsequent years that remain before the Internal Revenue Service. The Department of Justice wrote plaintiff's counsel on April 4, 2008, requesting additional information regarding the individual taxpayers involved in the transaction at issue. Plaintiff provided a response on June 10, 2008. The Department of Justice and the Internal Revenue Service are considering plaintiffs' offer. The parties support continuing the stay in this action pending the completion of the proceedings in the related criminal proceedings. The newly submitted settlement offer from the plaintiffs is further reason for continuing the stay. The parties propose a further joint status report for November 14, 2008, to advise the Court of the status of any developments in the Stein criminal proceedings and settlement prospects.

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Respectfully submitted,

6/12/08 Date

s/Bradley A. Patterson BRADLEY A. PATTERSON LGI LLP 18101 Von Karman Ave., Suite 330 Irvine, California 92612 (949) 253-0500 Counsel for Plaintiff

6 /16/08 Date

s/Robert J. Higgins ROBERT J. HIGGINS Attorney of Record U.S. Department of Justice Tax Division Court of Federal Claims Section Post Office Box 26 Ben Franklin Post Office Washington, D.C. 20044 (202) 307-6580 JOHN A. DICICCO Deputy Assistant Attorney General DAVID GUSTAFSON Chief, Court of Federal Claims Section

6/16/08 Date

s/David Gustafson Of Counsel

Attorneys for the Defendant

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