Illinois auto dealer Jamie Auffenberg was acquitted this week of criminal charges in a federal tax-evasion case against him, his businesses and other defendants.
My faith in the system has been confirmed, Auffenberg said in a statement. I am so happy to close this difficult chapter in my life.
Auffenberg, 58, is a multifranchise dealer in OFallon and Belleville, Ill., east of St. Louis. He is a former chairman and longtime board member of the American International Automobile Dealers Association.
Although a jury in the Virgin Islands acquitted Auffenberg of criminal charges yesterday, legal sources told Automotive News that the Internal Revenue Service could seek to collect unpaid taxes that it thinks Auffenberg owes the government.
Auffenberg lawyer Clyde Kuehn told Automotive News he had vacillated over whether the change of venue from southern Illinois to the Virgin Islands, requested by the other defendants, would help or not.
"Today, I would say yes," he added.
Kuehn also said he's not a tax lawyer but acknowledged that victory in the criminal case "does not preclude civil pursuit" by the government of what it says are unpaid taxes.
In the criminal case, prosecutors alleged that Auffenberg conspired from 1999 to 2002 to divert millions of dollars of income from his businesses through a company in the Virgin Islands. The company claimed to be involved in Virgin Islands economic development but existed only as an illegal tax shelter, the government alleged.
Auffenberg was one of more than 60 wealthy mainland United States taxpayers who took advantage of a tax scheme created and run by the company, Kapok Inc., and its management subsidiary, the indictment alleged.
Among the other defendants were the alleged architects of the scheme -- identified as Peter Fagan, a physician, and James Ferguson, a certified public accountant. Both are licensed in Texas.
The trial lasted nearly two months. Prosecutors were unavailable for comment today.