New York Times – A Seattle hedge fund firm has come under scrutiny as a result of its work with questionable tax shelters.
Last week, for the second time in three years, a Senate subcommittee described the firm, the Quellos Group, as a maker and seller of abusive tax shelters, focusing on a high-end shelter that helped five wealthy clients shield $2 billion in taxes.
The firm has rejected such characterizations, saying that its tax shelter work, which began in the mid-1990’s and ended in 2001, was not only legitimate, but also small and separate from its main business.
But it was the tax shelter work that helped Quellos become one of the largest sellers of funds-of-funds, or funds that invest in hedge funds, former senior employees say. Quellos now manages more than $15 billion in assets for clients like the Hong Kong Jockey Club and the University of British Columbia.
