A Northbrook lawyer has been indicted on federal charges alleging he fraudulently helped clients claim millions of dollars in improper tax credits.

The eight-count federal indictment was returned against Gary J. Stern, who focuses his private practice on taxation, wealth transfer and estate planning.

Stern, 55, pleaded not guilty to the indictment at his arraignment today before U.S. District Judge Harry D. Leinenweber. He was released on $4,500 bond.

In November 2013, U.S. District Judge Robert W. Gettleman entered an order barring Stern from promoting tax fraud schemes and from preparing related returns, a statement from the U.S. Justice Department says.

Prosecutors alleged in a complaint at that time that Stern helped hundreds of clients — including NFL quarterback Kyle Orton — falsely claim more than $16 million in improper tax credits and avoid paying income tax on at least $3.4 million.

Stern consented to Gettleman’s civil injunction order without admitting to the allegations against him.

The indictment returned last week outlines Stern’s alleged actions involving Boonville Farms Inc. and seven individuals. The indictment involves allegations that Stern’s clients invested in oil and gas partnerships to receive tax credits under Internal Revenue Service Code Section 45K, formerly known as Section 29.

Stern worked at Chuhak & Tecson P.C. from 1996 until 2010. The indictment does not name or identify that law firm.

The indictment alleges Stern helped Boonville Farms receive a total of about $5.3 million in tax credits for tax years 1997 through 1999.

The indictment further alleges Stern helped organize a series of transactions for his clients that resulted in the transfer of Boonville Farms tax credits to an entity called the Merrillville Trust.

“In all, at least 34 grantors of Merrillville Trust reported the fraudulent ... tax credits on approximately 55 different joint and individual Form 1040 income tax returns for tax years including 2006, 2007 and 2008, resulting in a tax loss to the United States of about $4,898,076,” the indictment says. U.S. v. Gary J. Stern, No. 14 CR 580.

Chris C. Gair of Gair Law Group Ltd. represents Stern in the criminal case. He could not be reached for comment.

Randall A. Samborn, a spokesman for the U.S. attorney’s office in Chicago, declined to comment on the indictment.

If convicted, Stern faces a maximum of three years in prison and $250,000 fine on each of the eight counts in the indictment.

In 2011, Orton, a former Chicago Bears quarterback who now plays for the Buffalo Bills, filed a lawsuit against Chuhak & Tecson and named as defendants four attorneys, including Stern, who worked at or were previously employed at the firm.

Filed in the Cook County Circuit Court Chancery Division, the suit says Orton and others lost millions of dollars due to the alleged breach of fiduciary duty and fraud. The case is Kyle R. Orton, et al. v. Chuhak & Tecson P.C., et al., No. 11 CH 44662.

Orton’s lawyers sought documents from the defendants that the law firm contended were protected by attorney-client privilege.

The plaintiff attorneys countered that the communications between Chuhak & Tecson and the parties that put together the tax credit deals were not protected by attorney-client privilege because of the crime-fraud exception.

Circuit Judge Margaret Ann Brennan agreed with the plaintiffs’ position, said their attorney, Daniel F. Konicek of Konicek & Dillon P.C. in Geneva. The attorney-client privilege issue is now on appeal in the 1st District Appellate Court.

“We weren’t surprised (by Stern’s indictment) because the amount of information we had put together showed clear evidence of fraud putting together the tax credit scheme,” Konicek said.

Stern, a University of Chicago Law School graduate, became a lawyer in 1983.