'Genius' Derivatives Trader Busted For Not So Genius Tax Evasion Scam

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Llewllyn Connolly, allegedly 44, is a Harvard Business School alum who's spent the last couple decades working for Wall Street firms including Lehman Brothers, Goldman Sachs and, most recently, Swiss Re, as a managing director. He and his wife, Fay Lin, live in an apartment on Bond Street, which some of you may recognize as a New York address. Problem was, Connolly didn't feel like paying New York City taxes, so he came up with a not terribly inventive way to avoid doing so, which involved claiming he was single and living in London.

It wasn't a very good scam, and state auditors challenged his 2005 and 2006 returns. Feeling ballsy and seriously not wanting to give the government any money, Connolly again claimed to be a bachelor living across the pond for his 2007 returns. He was again challenged and this time put a little effort into creating fake receipts for stays at the Gramercy Hotel. You know, to give the London-residence lie some legitimacy.

Unfortunately, the jig was up! Knowing it was only a matter of time before he was headed dowtown, Connolly pleaded guilty Wednesday two two felonies for dodging a $1 million in taxes. In order to stay out of prison, he has to pay $2.6 million in back taxes and penalties, plus $350,000 in fines and do 300 hours of community services. According to his lawyer, he's "volunteered to tutor former inmates in computer, math and science skills."

Trader Pleads Guilty To Tax Fraud [NYDN]

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