NYLJ, Aug. 5, 2011
SUMMARY
John J. O'Brien, 48, a mergers and acquisitions specialist who left Sullivan & Cromwell in 2009, pleaded guilty to four misdemeanors before Southern District Magistrate Judge Henry B. Pitman, conceding he failed to pay taxes in 2005 and 2007, and failed to file income tax returns in 2004 and 2006. Mr. O'Brien's voice shook as he allocuted for the court and said, "I plead guilty, your honor." Mr. O'Brien's range under the advisory U.S. Sentencing Guidelines is three years and one month to three years and 10 months.
Story
Former Sullivan & Cromwell partner John J. O'Brien admitted yesterday to failing to pay more than $2.8 million in personal income taxes on profits he earned at the firm.
Mr. O'Brien, 48, a mergers and acquisitions specialist who left the firm in 2009, pleaded guilty to four misdemeanors before Southern District Magistrate Judge Henry B. Pitman, conceding he failed to pay taxes in 2005 and 2007, and failed to file income tax returns in 2004 and 2006.
Mr. O'Brien's voice shook as he allocuted for the court and said, "I plead guilty, your honor."
Magistrate Judge Pitman said yesterday that Mr. O'Brien's range under the advisory U.S. Sentencing Guidelines is three years and one month to three years and 10 months. Mr. O'Brien is scheduled to be sentenced on Nov. 16.
His admissions were made pursuant to a plea agreement reached between Mr. O'Brien's lawyer, solo practitioner Russell T. Neufeld, and Southern District Assistant U.S. Attorney Stanley J. Okula. Under the plea agreement, Mr. O'Brien is obligated to pay not less than $2.8 million in restitution.
A criminal information released yesterday revealed that Mr. O'Brien earned partnership income of $10.8 million between 2001 and 2008. But instead of paying his taxes, the information states, Mr. O'Brien sprung for the purchase of a weekend home, several trips abroad and a $3 million investment in a rare books business.
Mr. Neufeld and Mr. Okula explained to the court that Mr. O'Brien had already began paying back the Internal Revenue Service once the investigation into tax problems began over a year ago. To date, Mr. Neufeld said his client has paid back more than $800,000.
Inquiring into the defendant's finances, Magistrate Judge Pitman asked, "Is the government satisfied there isn't a chunk of cash sitting out there somewhere?"
Mr. Okula said the government did not believe that to be the case.
Mr. O'Brien was released on a promise to post a $100,000 personal recognizance bond.
He was the second lawyer from a major law firm to be charged with violating the Internal Revenue Code in the past month.
In July, former Kirkland & Ellis senior partner Theodore L. Freedman pleaded not guilty to four counts of income tax fraud found on allegations he misrepresented more than $2 million in partnership income from the firm.
Mr. Freedman, a bankruptcy specialist who left the firm in 2010, stands accused of cheating the IRS out of more than $1 million, including $542,358 in expenses for a non-existent sole proprietorship law practice.
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| John O'Brien |
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