Michael Kerekes, a former principal and attorney at BDO Seidman, pleaded guilty to a tax shelter scheme that prosecutors allege helped wealthy investors stay wealthy by avoiding $200 million in taxes.

The Chicago Tribune reported that Kerekes, who lives in Santa Monica, CA, said he knew what he was doing was against the law during the plea in Manhattan federal court. He is cooperating with an ongoing investigation of tax work performed by his former employer. Prosecutors allege the scheme he was involved in allowed clients to falsely report $1 billion in investment losses, according to the paper.

Kerekes, 46, was a partner and an attorney at BDO Seidman from 1998 to 2008 and a member of the firm's Tax Solutions Group from 1998 to 2003. The U.S. Department of Justice said the firm's leadership formed the group and it was devoted to designing, marketing, and implementing high-fee tax strategies for wealth clients, including tax shelter transactions. BDO Seidman maintained offices in several locations including New York, Los Angeles, and Chicago.

While with the Tax Solutions Group, Kerekes engaged in the design, sale, and implementation of two tax shelter transactions with the Chicago office of the law firm Jenkens & Gilchrist and an international bank with U.S. headquarters in New York, according to the Justice Department. The Tax Solutions Group "handsomely rewarded the accounting firm personnel involved" in the group's transactions and the firm's CEO gave out additional bonuses from the profits earned from the sale of tax shelter products, The Justice Department said.

Kerekes is facing a total of 10 years in prison, five years for each felony conspiracy and tax evasion charge, when he is sentenced a year from now.