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LOS ANGELES from www.courthousenews.com – – “Girls Gone Wild” creator Joe Francis claims in court that BDO Seidman duped him into investing millions of dollars in tax shelters that cost him millions more in tax liabilities.

Francis, 39, sued BDO Seidman in Superior Court, alleging breach of fiduciary duty, fraud, fraudulent nondisclosure, negligent misrepresentation, negligent nondisclosure, and professional negligence.

Francis was charged with tax evasion in Reno in April 2007, accused of deducting more than $20 million in false business expenses. The case was moved to Los Angeles, and in September 2009 Francis pleaded guilty to filing false tax returns and bribing Nevada jail workers for food while incarcerated in Reno.

Francis also faced claims that girls were coerced into appearing in “Girls Gone Wild,” and that footage was used without their consent.

Now Francis claims that BDO, “one of the world’s largest accounting firms,” cost its clients millions of dollars by having them invest in the firm’s tax shelters.

“In the late 1990s and continuing through at least 2003, BDO created investment schemes which were purportedly lawful tax deferral/avoidance products that BDO mass marketed to its clients in order to generate millions of dollars in fees,” the 36-page complaint states.

“BDO, and others, induced plaintiff to invest millions of dollars in the investment schemes, and BDO falsely represented to plaintiff; orally and in writing, that it was ‘more likely than not’ that a deduction taken for losses generated by such investments would be upheld if challenged by the IRS.”

Francis says he first used BDO in 2001, when the firm offered to audit his company, Mantra Films, and do his taxes.

Based on BDO’s assurances, Francis says, he invested in the firm’s tax shelters and claimed “substantial” deductions on his 2001 federal and state returns.

Francis claims he did not know, and BDO Seidman did not tell him, that its strategies did not “comport with then existing tax law, and that the IRS would likely succeed in challenging any deductions taken for losses generated by the investments.”

After the IRS took a closer look at Francis’ 2001 tax return, it said he owed more than $9 million and another $3 million in penalties and interest, the complaint states.

“As of the filing of this complaint, the exact amount of any back taxes, penalties, and interest that plaintiff may be assessed in connection with the tax shelter product is currently being litigated and has not been determined with finality,” according to the complaint.

Francis says that but for BDO’s misconduct he would not have incurred the liabilities nor invested in the firm’s tax shelters in the first place.

He is represented by Michael Avenatti with Eagan Avenatti of Newport Beach. He seeks at least $20 million in damages.

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