Intel Free Press

In the early 2000s, William “Trip” Hawkins—founder of video game publisher Electronic Arts—was living the good life. He owned a private jet, two multi-million-dollar homes, sent his kids to private school, had four vehicles between himself and his wife, held San Francisco Giants season tickets, and employed a private staff.
Hawkins appeared to be flush with cash. He once had an estimated worth of $100 million while manning the video game company that has long produced best-sellers like the Madden NFL franchise, and he cashed out company stock repeatedly. He sold $24.4 million of EA stock in 1996. The following year, he sold $3.7 million more. In 1998, he sold $38.76 million.
But Hawkins had a peculiar way of keeping his cash flow up; he wasn’t paying all the taxes connected to the proceeds of some of his stock sales. Instead, he participated in a tax sheltering setup designed to produce on-paper “monetary losses” to offset the gains. The scheme was all done through accounting firm KPMG, which used convoluted Swiss and Cayman Islands deals that eventually raised the eyebrows of Internal Revenue Service (IRS) tax auditors. The IRS and the California Franchise Tax Board eventually cried foul.
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