BizLawCentral: contempt order sought against lawyer for Andersening millions of documents

In August, the Attorney General filed a USD34 million lawsuit against lawyer Deutch for swindling thousands of people facing serious and expensive tax collection problems with the IRS. On August 31, the court issued an order that prohibited Deutch from destroying evidence.

“Despite this order,” the Attorney General said in the application, “Deutch has been routinely shredding documents on an almost a weekly basis.” The Attorney General estimates that to date Deutch has shredded some 1,643,000 to 2,708,600 pages of documents. Deutch’s shredding campaign has permanently deprived the Attorney General of evidence needed to fully prosecute the action against her, says the AG.

Deutch built her practice by extensive advertising, high profile PR activity including appearing on television programmes promoting her opinions.

In the previous order, Deutch was ordered to pay approx USD435,000 in preliminary refund to clients who she had told she would assist to reduce their tax bills while either failing to act or advising techniques which were ineffective, leading to clients suffering investigations and penalties for late payment.

But instead of making payments, Deutch dissipated her funds in hand, says the AG including "transferring hundreds of thousands of dollars in equity from the sale of her home to a media firm. She also personally withdrew USD241,000 from the law firm’s accounts and her personal accounts at just one bank. In addition, since the preliminary injunction order was issued, Deutch made more than USD21,000 in unnecessary expenditures, including gifts to family and friends, and a payment to a NASCAR racing team."

Her firm billed approximately USD25 million per year - but now she claims she cannot meet the Order due to lack of funds.

The AG has asked for fines, jail, that Deutch's assets be frozeon and a receiver to manage the law firm be appointed by the Court.