You’re a partner at the Chicago powerhouse law firm of Kirkland & Ellis, which generally ranks as the most profitable non-New York Biglaw firm in the country. But you decide that a six- to seven-figure income isn’t enough for your needs. So you do this:
1. Sell fraudulent certificates of deposit for $1.8 million.
2. Set up a bank account in the name of an LLC in Florida for the money.
3. Hire somebody to use the money to buy cashiers checks.
4. Proceed to blow hundreds of thousands of dollars on a girlfriend, a wedding, a honeymoon, and his Barrington, IL. lifestyle.
5. Leave the money off your tax return.
A Chicago-area attorney was convicted of tax evasion in federal court Wednesday for attempting to hide more than $1 million from the IRS. Robert W. Hallock, 62, a former partner at Kirkland & Ellis, was convicted in a bench trial of earning some $1.8 million in 1997 from the sale of fraudulent certificates of deposit.
Hallock funneled the money through a Florida bank account and used it to buy two cars, a truck and nearly $145,000 in jewelry, said Atlanta-based U.S. Atty. David Nahmais, whose office handled the case. He also gave $150,000 to his girlfriend and her parents, prosecutors charged.
Hallock sounds like a criminal and a moron. But he does get points for cojones and creativity. Here’s what he argued at trial:
[Hallock] argued that since [he] was obligated under the UCC to repay the money, he did not have any income — in his words, “a good faith belief, even if crazy, negates willfulness.”
Leave it to a tax lawyer to come up with an argument like that.
Former Kirkland & Ellis Partner Convicted of Tax Evasion [TaxProf Blog]
Bad Barrington Barrister Busted [Roth & Company, P.C.]
Chicago-Area Attorney Convicted of Tax Evasion [Chicago Tribune]