2 plead guilty in Seattle to scheme that helped wealthy avoid paying $240 million in taxes

SEATTLE – avoid paying taxes on $1.3 billion in capital gains.

The U.S. attorney's office says Quellos LLC chief executive Jeffrey Greenstein and the investment firm's tax attorney, Charles H. Wilk, pleaded guilty Friday to conspiracy to defraud the government and aiding in the filing of a false tax return. They agreed to pay $7 million in penalties and to speak to their graduate schools about business ethics.

In exchange, the government says it won't recommend more than six years in prison at sentencing.

The government says the firm's clients didn't know about the scheme and have paid $240 million in back taxes.