U.S. sues Chicago attorney to halt phony tax shelters

John E. Rogers, a Chicago attorney formerly affiliated with the law firm Seyfarth Shaw LLP, was sued by the U.S. Justice Department for allegedly promoting phony tax shelters.

Rogers, 69, designed distressed asset debt and distressed asset trust tax shelters for his clients, allowing them to claim, though not sustain, losses on Brazilian debt resulting in more than $370 million in improper deductions, the Justice Department said today in a statement.

Rogers was forced to resign from the firm in 2008, according to the statement. The government's complaint, filed yesterday in federal court in Chicago, seeks a court order barring the promotion of tax schemes it called “abusive.”

“It is particularly disturbing when a lawyer, who is supposed to help clients comply with the law, instead helps them break it,” Acting Assistant Attorney General John A. DiCicco said in the statement.

Rogers, now the principal of the Chicago firm of Rogers & Associates, didn't immediately respond to a voice-mail message seeking comment.

The Internal Revenue Service began investigating Rogers in 2004. After Rogers met with his fellow Seyfarth partners in 2005, the firm decided that the distressed-asset transactions “should be disclosed as potentially abusive tax shelters,” according to the complaint.

Seyfarth later told Rogers to stop promoting the alleged schemes and, when it learned in 2008 that he hadn't stopped, forced him to resign, the U.S. said.

Kevin Livingston, a spokesman for Chicago-based Seyfarth, said he couldn't immediately comment on the allegations.

The case is U.S. v. John E. Rogers, 10-cv-07068, U.S. District Court, Northern District of Illinois (Chicago).