On February 4, 2013, Taft Stettinius & Hollister LLP won a defense jury verdict for client Daryl Haynor, KPMG tax partner, in United States of America v. Daryl Haynor and Jon Flask, Case No. 1:09-cr-00172 (S.D. Ohio).
The prosecution, led by senior Department of Justice Tax Division trial attorneys, focused on sale-leaseback transactions involving the retail store leasehold improvements of six Fortune 500 retailers who entered into the transactions to raise capital at favorable rates and to garner favorable tax treatment by accelerating the depreciation deductions for the real property – associated leasehold improvements. The case was a spin-off from the 2005 Deferred Prosecution Agreement between KPMG and the DOJ, whereby KPMG paid a $456 million fine and agreed to cooperate in the government's continuing investigation of what the IRS considered to be dubious tax shelters. Over the course of the investigation, 24 individuals were indicted, five pleaded guilty, three were convicted after a jury trial, and one was acquitted.
Daryl Haynor and his co-defendant, Jon Flask, were indicted together in the fall of 2009. Taft White Collar Criminal Defense attorneys Ralph W. Kohnen and Jeanne M. Cors represented Haynor. They were assisted by Taft tax associate Sonya S. Jindal. After more than three weeks of testimony and another week of jury deliberations, the verdict was returned on February 4, 2013 – not guilty on three of the four counts that were presented and a hung jury on the fourth count. On February 6, 2013, Judge Beckwith dismissed the final count of the Haynor indictment — the sole count on which the Jury had been unable to reach a verdict.