US judge sentences ex-tax lawyer to probation

NEW YORK, March 30 (Reuters) - A U.S. judge sentenced a former partner in the international law firm Arnold & Porter to three years probation on Tuesday following his September 2008 guilty plea on tax fraud and tax evasion conspiracy charges.

The attorney, Peter Cinquegrani, admitted in U.S. District Court in Manhattan that from 1998 to 2001 he and others, including employees of the accounting firm Ernst & Young [ERNY.UL], developed a tax shelter for wealthy clients and created a legal opinion they would use to support it.

Four former Ernst & Young employees were convicted and one other former employee pleaded guilty in the case.

"When you break it down, I helped people cheat on their taxes," Cinquegrani told Judge Sidney Stein at Monday's sentencing proceeding. "I knew what I did was wrong and I did it anyway."

The former lawyer said he had been driven by a desire to be "a big shot" among tax lawyers and he apologized.

The judge told Cinquegrani he was not sending him to prison because of the setbacks his actions had already caused in his personal and professional life and due to his extensive cooperation with government investigators.

Cinquegrani, who is also a former employee of the U.S. Internal Revenue Service, also admitted that in 2003 he lied under oath to the tax authority when he was asked about the tax shelter.

In September 2008, Arnold & Porter, which has offices in Washington DC, New York, London and other cities, said in a statement that it had cooperated with the investigation. It also said it had settled civil claims with the IRS on the transactions and resolved all related private claims.

Cinquegrani worked at Arnold & Porter from 1986 through 1993 and again from 1997 through April 2007. He became a partner in 2002. He was employed as an attorney with the IRS from 1994 until 1997.

The case is USA v Cinquegrani, U.S. District Court for the Southern District of New York, No. 08-00849. (Reporting by Grant McCool; Editing by Bernard Orr)