Olswang’s US ally hit by tax scandal

Just one day after disgraced DC lobbyist Jack Abramoff began his prison sentence, Greenberg Traurig’s former head of tax, Jay Gordon, was disbarred for taking over $1.2m (£640,000) in kickbacks between 1999 and 2004.

Olswang’s US ally has fired Gordon. Firm president and chief executive, Cesar Alvarez, said in a statement that the incident was “a regrettable and isolated situation,” adding that “we had zero tolerance for this lawyer’s ethical lapse.”

Gordon admitted that he recommended wealthy clients, including the current head of New York City’s transport authority, to questionable tax shelters.

One tax-shelter sponsor, Distressed Assets Corporation, deposited $600,000 (£315,000) referral fees in a Greenberg account, which Gordon justified by fraudulently billing over 1,000 hours to increase his bonus.

The situation was uncovered when the head of New York’s Metropolitan Transportation Authority (MTA), Peter Kalikow, had his $3.2m (£1.68m) tax shelters that Gordon had recommended disallowed by the US Internal Revenue Service (IRS).

Kalikow complained to Greenberg and after an internal investigation it transpired that tax-shelter sponsor Fortrend International paid Gordon $292,000 (£153,000) as a referral fee for Kalikow’s custom. Kalikow claims no knowledge of the fee.

Gordon resigned from 1,334-lawyer Greenberg in November 2004 and has not practised since. Abramoff also retired from Greenberg in 2004, after he “disclosed to the firm personal transactions and related conduct which are unacceptable to the firm and antithetical to the way we do business,” according to a 2005 firm statement.