28 January 2019Accounting & tax analysis

Shivkov v Artex 831(b) “conspiracy” extends beyond named participants: LFDS lawyer

One of the lead lawyers involved in the Arizona-based lawsuit Shivkov v Artex Risk Solutions has said that he believes the alleged conspiracy extends beyond the named defendants in the case.

David Deary, along with attorneys Ralph Canada and Jim Flegle at Loewinsohn Flegle Deary Simon (LFDS), represented the plaintiffs In Dimitri Shivkov v Artex Risk Solutions who accused the defendants of being part of a massive captive insurance strategy conspiracy.

The defendants are said to have disguised tax shelters as legitimate 831(b) captives and extracted money from their clients.

Furthermore, the suit also alleges that the defendants had entered into undisclosed, illegal business arrangements with each other and a nationwide referral network of investment, accounting, and legal advisors to refer clients to them.

“I believe the same type of conspiratorial conduct exists in a number of other major micro-captive management companies and those who worked with them,” said Deary.

“Each of the professional advisors involved in the design, marketing, sale, implementation, and management of the captive insurance company had specific roles and responsibilities that were crucial to the execution of their pre-planned scheme.”

Gallagher  hit back at the claims, suggesting the class action lawsuit has “no merit”.

This story is part of a larger article where Captive International spoke to Deary about the case, what he believes went wrong and its wider implications for the industry.  Click here to read it.