mycfo.bmpSome former employees of the failed MyCFO, the financial service company started during boom to cater to wealth individuals, are subjects of criminal investigation for proposing sham tax shelters to its clients.

The WSJ has the story about MyCFO, its demise, and the shadow hanging over those who pushed the tax shelter — and some of the clients that used it.

In particular, the story focuses on the role of some key lawyers at the company, who aggressively proposed the shelter. It also focuses on John Doerr, a well known venture capitalist and lead investor who in email citations from 2001 appeared to applaud the company for pursuing the shelter, according to the WSJ. The practice was only ruled invalid by the IRS only 2002, even if it had always been considered shady by some others.

The financial backers and board members of myCFO were Silicon Valley royalty. They included James H. Clark, co-founder of Netscape Communications and Silicon Graphics; John Chambers of Cisco Systems Inc.; Thomas Jermoluk, former chairman of Excite@Home; and former Netscape boss James Barksdale. The firm’s outside legal counsel was Larry Sonsini, lawyer to Silicon Valley’s stars.