NEW YORK (Reuters) - Two former partners at the Ernst & Young LLP ERNY.UL accounting firm were sentenced to prison on Thursday for their roles in a $2 billion scheme to help wealthy people evade income taxes.
Robert Coplan was sentenced to three years in prison and fined $75,000, while Martin Nissenbaum was sentenced to 2-1/2 years in prison and a $100,000 fine.
U.S. District Judge Sidney Stein also ordered each man to perform 120 hours of community service annually for three years. At least half of the service is to counsel tax professionals about their experiences.
Stein said his sentences reflected a need for “general deterrence.”
Coplan’s lawyer Paula Junghans and Nissenbaum’s lawyer Isabelle Kirshner said their clients, each of whom were also lawyers, plan to appeal.
The defendants were among four former Ernst & Young partners convicted in May on tax evasion and conspiracy charges after a two-month trial.
Prosecutors said the pair defrauded the IRS from 1998 to 2006 by creating, marketing and using tax shelters to help people with more than $10 million of taxable income reduce or avoid income taxes.
Stein is scheduled to sentence the remaining defendants, Richard Shapiro and Brian Vaughn, on Friday, and said he intends to impose prison terms on each.
Coplan and Nissenbaum were also convicted of obstructing the Internal Revenue Service, while Coplan and Vaughn were also convicted of making false statements to the IRS.
None of the defendants remains employed by Ernst & Young, company spokesman Charles Perkins said.
Coplan was once national director of Ernst & Young’s center for wealth planning, and an IRS branch chief. Nissenbaum was once national director of Ernst & Young’s personal income tax and retirement planning practice.
The case was part of a crackdown on illegal tax shelters. Employees at another accounting firm, KPMG LLP KPMG.UL, were also among the targets.
Saying the experience has “ruined me and ruined my family,” Coplan apologized for his actions. “I have deep regret that I made mistakes 10 years ago,” he told the judge. “I‘m constantly reminded of the pain I’ve brought to my family.”
Nissenbaum also apologized, expressing “deep sorrow” and adding: “It pains me to think I will never again have meaningful work in my chosen profession.”
Stein told both defendants he understood the pressure to add business but that this did not excuse their crimes.
“I understand there was pressure coming from higher-ups at Ernst & Young,” he told Coplan. Stein nevertheless said “there’s really very little doubt that the loss is in the range of $2 billion,” and that the conduct was “very serious.”
Coplan is 57 and resides in Plano, Texas, while Nissenbaum is 54 and resides in Brooklyn, New York, the government said.
The case is U.S. v. Coplan et al, U.S. District Court, Southern District of New York, No. 07-cr-00453.
Reporting by Jonathan Stempel, editing by Matthew Lewis, Leslie Gevirtz