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Former IRS examiner gets probation for conflict of interest
July 16, 2013 / 5:31 PM / in 4 years

Former IRS examiner gets probation for conflict of interest

NEW YORK, July 16 (Reuters) - A former Internal Revenue Service examiner was sentenced to three years of probation on Tuesday for pursuing a job at a bank at the same time that he was negotiating an IRS settlement with the bank over an audit he had conducted.

U.S. District Judge John Keenan also imposed a fine of $10,000 on the former examiner, Dennis Lerner, saying that he had shown “dopey judgment” when he applied for the position of U.S. tax director for Germany’s Commerzbank AG.

“You’re an intelligent fellow with a master’s degree,” Keenan said. “You showed the judgment that some teenager would.”

In a short statement, Lerner apologized for his actions. “I just had very poor judgment,” he said.

Keenan, who was an IRS examiner from June 2010 through August 2011, audited Commerzbank in the summer of 2011 for what U.S. prosecutors said was $1 billion in unreported income. Lerner then led settlement negotiations for the IRS with the bank.

During the negotiations, Lerner pursued the position of tax director at Commerzbank and got the job in September 2011, according to prosecutors.

Lerner’s actions did not influence the settlement amount, Keenan said at the sentencing in U.S. District Court in Manhattan. Commerzbank, which cooperated with the investigation into Lerner, declined to comment after his sentencing on Tuesday.

Lerner pleaded guilty to violating a criminal conflict-of-interest law and to illegally disclosing confidential audit information to an individual who was not employed at the IRS.

Prosecutor Randall Jackson of the Manhattan U.S. Attorney’s Office asked Keenan on Tuesday to sentence Lerner to four to 10 months in prison.

Lerner’s crime “represents a tremendous betrayal of the public trust,” Jackson said.

Lerner’s lawyer, Sharon McCarthy, asked for leniency given Lerner’s precarious health. He suffers from diabetes and heart problems that necessitated quadruple bypass surgery, according to court documents. As a 60-year-old felon, it is unlikely he will find work in the tax field, she said.

The case is USA v. Lerner, U.S. District Court, Southern District of New York. No. 12-02520.

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