March 5, 2002 - United States Attorney Patrick L. Meehan announced today the filing of an indictment* charging Robert Jacobs, Esq. and James Delaney with tax charges relating to defendants' scheme to shelter taxable income by falsely claiming that losses from a partnership were deductible.

The grand jury alleged that Jacobs, a tax law partner at the firm of Wolf, Block, Shorr & Solis-Cohen, and who was serving as the attorney for Delaney and J.G. Wentworth, conspired to defraud the IRS. Jacobs, the indictment alleged, caused the partners of J.G. Wentworth, S.S.C. to claim they were lawfully entitled to shelter substantial income from taxation by falsely deducting approximately $15 million in partnership losses between 1996-98. The grand jury alleged that Jacobs did so even though the J.G. Wentworth, S.S.C. partnership documents did not allow such deductions.

J.G. Wentworth, S.S.C. was a partnership formed in 1995 by defendant James Delaney and others to purchase structured settlements consisting primarily of obligations to pay claims from personal injury lawsuits or government-sponsored lotteries. J.G. Wentworth would pay a lottery winner or personal injury claimant a reduced sum immediately in exchange for the right to receive a larger sum of future payments over an extended period of time.

The indictment charges that Jacobs created and backdated documents in 1998 to justify the improper deductions, thereby allowing J.G. Wentworth partners, including Delaney, to fail to timely pay the IRS approximately $4.8 million in taxes. The scheme included presenting false and backdated documents to accountants preparing the tax returns of the J.G. Wentworth partners, and also to IRS auditors examining Delaney's 1996 tax return.

Jacobs and his law firm collected approximately $2.7 million in legal fees from J.G. Wentworth between 1996 and 2002, the grand jury alleged.

Delaney and Jacobs are both charged with attempting to obstruct in 1998 an IRS audit of Delaney's 1996 tax return. The grand jury charged that Delaney and Jacobs caused the IRS auditor to receive documents that falsely supported Delaney's deduction of approximately $2.3 million in losses in 1996. Delaney's use of those losses caused him to reduce his 1996 tax from $830,569 to $15,938.

DEFENDANT	ADDRESS	AGE [Date of Birth]
Robert Jacobs James Delaney	1235 Conshohocken State Rd., Gladwyne, Pa. 112 Rose Lane, Haverford, Pa.	12/17/51 12/6/50

If convicted Jacobs could be sentenced to eight years imprisonment and fined $500,000. Delaney could be sentenced to three years imprisonment and fined $250,000.

The case was investigated by the Internal Revenue Service, Criminal Investigation Division, and has been assigned to Assistant United States Attorney Timothy R. Rice.