Legal News

Former Kaye Scholer Partner Pleads Guilty to Tax Charge

By Peter Lattman

It’s tax season Law Blog readers, so you know what that means: high-profile tax prosecutions. And there was one in the papers this morning that made us choke on our Cheerios. John J.P. Howley, a former partner at Kaye Scholer in New York, was fined $10,000 yesterday after pleading guilty to failing to file a state personal income tax return for 2004. Here are stories from the Newsday and the NY Post, which pointed out that “unlike actor Wesley Snipes — who escaped stiff tax-evasion charges last week — Howley couldn’t contend that he did not know the tax laws.”

Indeed that’s probably true. Last April, Howley, who left Kaye Scholer for a job at Philippines-based Davies Energy Systems at the end of last year, argued before the Supreme Court, representing the governments of Mongolia and India in a tax dispute with New York City. It’s a fascinating case that we posted on last June. Howley lost the case, in which the court held that New York City’s real-estate tax claims against the governments of Mongolia and India could proceed to trial. For years, the missions of India and Mongolia argued they did not have to pay New York City more than $18 million in property taxes on buildings those countries use to house their UN staff. Here’s the opinion; a NYC Law Department primer on the case; and a NYC law department press release.

Howley (Skidmore, New York Law) is a 49-year-old resident of Colonia, N.J., who ran Kaye Scholer’s pro bono activities. He admitted yesterday that although he earned “substantial New York income” as a lawyer, “I knowingly failed to file my 2004 New York nonresident personal income tax return.” He was sentenced to a conditional discharge, which means the misdemeanor charge will be dismissed if he pays the fine and the taxes he owes and does not get arrested again within the next year. He was represented by Ronald Russo of Herzfield & Rubin.

The DA’s office said his plea deal was conditioned on his filing returns for 1997 through 2006 and paying nonresident personal income taxes, interest and penalties totaling about $150,000.

A spokesman for Kaye Scholer told the Law Blog that the firm was unaware of any issues regarding Mr. Howley’s failure to file personal income tax returns.

Full post as published by Law Blog - WSJ.com on February 05, 2008 (boomark / email).