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Ex-Deutsche Bank banker gets 3-1/2 yrs prison in tax fraud

The logo of Germany's largest business bank, Deutsche Bank, is illuminated at the bank's original headquarters in Frankfurt January 31, 2012
The logo of Germany's largest business bank, Deutsche Bank, is illuminated at the bank's original headquarters in Frankfurt January 31, 2012

By Bernard Vaughan

NEW YORK (Reuters) - A federal judge in New York on Friday sentenced a former Deutsche Bank AG banker to 3-1/2 years in prison and to pay more than $100 million in restitution for his role in helping clients hide money in fraudulent tax shelters.

David Parse, 51, had been convicted in 2011 of mail fraud and obstruction charges, while being acquitted on conspiracy and tax evasion charges.

Prosecutors said that from 1994 through 2004, Parse, who was a certified public accountant, and others defrauded the IRS by designing and marketing bogus tax shelters.

They said Parse earned more than $3 million by steering clients to the shelters, and engineering transactions to keep their money out of the government's hands.

"I have tried to live my life...in a proper manner," Parse said before he was sentenced. "I regret not seeing things for what they truly were."

The sentence includes three years of supervised release, and was imposed by U.S. District Judge William Pauley in Manhattan. Pauley also ordered Parse to forfeit $1 million.

"Unfortunately, it was your selfishness that brought you here today," Pauley told Parse. "What were you thinking? Undoubtedly you thought you'd never get caught."

Parse had been an investment representative at Deutsche Bank Alex. Brown's Chicago office from 1995 through April 2006, according to the government's sentencing memorandum.

Paul Shechtman, a lawyer for Parse, said his client plans to appeal.

Prosecutors had sought an eight-year prison term, the same sentence imposed earlier this month on Donna Guerin, a former partner at now-defunct law firm Jenkins & Gilchrist, who pleaded guilty in September to conspiracy and tax evasion charges stemming from her role as a marketer and implementer of tax shelters. She was also ordered to pay $190 million in restitution.

Parse had sought no prison time, citing his alleged limited role in the scheme.

The case was part of what prosecutors have called "the largest criminal tax fraud in history," resulting in more than $7 billion of fraudulent tax deductions or benefits.

"David Parse used his professional acumen to help his wealthy clients make an end-run around the IRS, depriving the treasury of billions in tax revenue," Preet Bharara, the U.S. Attorney for the Southern District of New York, said in a statement. "And for his role in this sprawling and massive fraud, he is now paying the price."

Paul Daugerdas, a former colleague of Guerin's at Jenkins & Gilchrist, and former BDO Seidman accounting firm chief executive Denis Field, were found guilty for their roles in the scheme in 2011.

But last June, Pauley ordered a retrial for Daugerdas, Field and Guerin after he found that a juror had lied during jury selection.

Guerin avoided trial after pleading guilty, while Daugerdas and Field await retrial. A fifth defendant was acquitted at the first trial.

The case is U.S. v. Daugerdas et al, U.S. District Court, Southern District of New York, No. 09-00581.

For Parse: Paul Schechtman of Zuckerman Spaeder.

For the government: Nanette Louise David, U.S. Attorney's Office, Southern District of New York.

(Reporting By Bernard Vaughan; Editing by Kenneth Barry)

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