An appeals court in Illinois has upheld the dismissal of a $16 million claim by accounting firm BDO Seidman against several professional liability insurance companies that the firm hoped would pay a legal settlement on its behalf.
BDO had agreed in 2002 to pay $16 million to settle charges that it knew about, but did not report, that its tax client, James Gibson, and his structured settlement company, SBU, misappropriated $65 million from clients. BDO signed a pretrial diversion agreement to pay $16 million to a fund established to pay restitution to Gibson's clients. The amount represented how much Gibson received from his clients but did not report as taxable income.
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