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Judge Kaplan hammers the DOJ in the KPMG case
As widely anticipated, U.S. District Judge Lewis Kaplan dismissed all charges today against 13 former KPMG partners in the KPMG tax shelter case because of the prosecution's interference with the defendants' Constitutional rights under the Fifth and Sixth Amendments. A...
Threatening to go Arthur Andersen on KPMG
This earlier post noted how the shadow of the sad case of Jamie Olis continues to hang over the KPMG tax shelter case in New York, and this post explored how Olis' defense was financially undermined by the Justice Department's...
KPMG continues to play rough with its former partners
In this earlier post, I noted that KPMG's resistance to paying its former employees' defense costs in the KPMG tax shelter criminal case could end up being an element in prompting US District Judge Lewis Kaplan to dismiss the charges...
The insidious nature of criminalizing business
Under mounting criticism over its dubious tactics in regard to threatening to go Arthur Andersen on KPMG in the prosecution of the firm's promotion of questionable tax shelters, the Justice Department is now making nice in Congress. Yesterday, deputy attorney...
Who exactly is Judge Kaplan?
This Paul Davies/Wall Street Journal Weekend ($) article provides a profile of U.S. District Judge Lewis Kaplan, the judge who is at the center of the KPMG tax shelter case. Judge Kaplan is quite a character, as reflected by his...
What's that criminal charge again?
One big problem with the federal government's criminal case against the defendants in the KPMG tax shelter case is that neither the defendants nor any of their clients engaged in any affirmative act of evasion, such as keeping false accounting...
Is KPMG's tough stance helping its former partners in the tax shelter case?
In connection with negotiations over its non-prosecution agreement with the Justice Department in the KPMG tax shelter case, KPMG decided to give in to a DOJ "suggestion" and revoke in the tax shelter case its longstanding policy of paying defense...
Judge Kaplan sticks to his guns
Federal judges and prosecutors often have a cozy relationship. So, it was not particularly surprising that Southern District of New York U.S. Attorney Michael Garcia requested that U.S. District Judge Lewis Kaplan delete the names of federal prosecutors and his...
The fraying KPMG tax shelter defense
U.S. District Judge Lewis Kaplan's decision earlier this week was a major victory for the defendants in the KPMG tax shelter case because it at least gives the defendants the basis for obtaining the financial means for defending the case...
Criminalizing corporate agency costs and the KPMG decision
As noted earlier here, U.S. District Judge Lewis Kaplan earlier this week slapped the Department of Justice upside the head for threatening KPMG with indictment in the KPMG tax shelter case unless the firm threw its partners to the wolves...
Disparate results from overreaching prosecutions
Amidst a busy summer day, I pass along a rare and quick afternoon post on disparate results emanating earlier today from a couple of cases involving overreaching prosecutions of businesspeople. First, Peter Lattman (here and here), Dave Hoffman and Ellen...
Our Justice Department at work
Yesterday, in the last day of testimony in the criminal trial of former key Enron executives Ken Lay and Jeff Skilling, the Enron Task Force confirmed in open court that it refuses to grant immunity to half-a-dozen former Enron executives...
Criminalizing the right to counsel
This earlier post examined the Justice Department's policy under the controversial Thompson Memo to threaten to go Arthur Andersen on companies that fulfill an obligation to pay defense counsel for current or former employees who are under criminal investigation or...
Criminalizing an executive's right to counsel
In the post-Enron era of criminalizing business, a business executive's attorney-client privilege with the company counsel of the executive has already become largely illusory (posts here, here here and here). Now, according to this Nathan Koppel/WSJ ($) article, the government...
Department of Coercion
John Hasnas is a professor of ethics and law at Georgetown University's McDonough School of Business and is the author of the new book, Trapped: When Acting Ethically is Against the Law (Cato 2006), which is an adaptation of Hasnas'...
Just an expense of doing business at KPMG
As KPMG's settlement of the class action lawsuit against the firm over its promotion of tax shelters lurches toward final approval, this NY Times article reports that the number of class members opting-out of the proposed settlement is unusually high...
Take this auditing job and shove it
So, how would you like being an auditor? First, Arthur Andersen was prosecuted out of business by the Justice Department in an ill-advised prosecution. Next, KPMG almost melted down in the face of a criminal investigation into its promotion of...
Certain KPMG tax shelter civil suits stayed
In an interesting development, U.S. District Judge Vaughn R. Walker in San Francisco stayed a series of civil lawsuits over the legality of some KPMG LLP tax shelters pending the outcome of parallel criminal proceedings against certain of the individual...
KPMG class action tax shelter settlement moves toward final approval
Following on this earlier post regarding the proposed settlement, U.S. District Judge Dennis Cavanaugh preliminarily approved a proposed $225 million class-action settlement by KPMG LLP and the Sidley Austin Brown & Wood LLP law firm over questionable tax shelters that...
KPMG serves up more sacrificial lambs
As KPMG LLP attempts to survive as a going concern after cutting a deal with the federal government to avoid a criminal indictment in connection with its controversial tax shelter practice, the firm served up 10 additional criminal defendants for...
More on criminalizing risk-taking
Robert Weisberg is Edwin E. Huddleson, Jr. Professor of Law and director of the Criminal Justice Center at Stanford University, where he teaches a course on white collar crime with David Mills, who is a senior lecturer there. In this...
WSJ editors do better, but where have they been?
After criticizing the Wall Street Journal yesterday for running a listless article about prosecutorial misconduct in the Enron-related criminal cases, it's only fair to note that the WSJ editors do much better today in this editorial ($) (see this related...
KPMG moves to settle tax shelter class action
Battered and bruised after negotiating a deferred prosecution agreement with the Justice Department that narrowly prevented a criminal indictment of the firm, accounting giant KPMG LLP took another baby step yesterday in its plan to attempt to preserve the firm...
In the wake of KPMG
Following on this post from last month, this New York Times article reports that, on the heels of KPMG's deferred prosecution agreement with the Justice Department and the subsequent indictment of eight former KPMG partners, federal prosecutors are apparently focusing...
Thank you, Andersen and Enron
Allan Sloan in his Washington Post column has an interesting take on the Justice Department's decision not to indict KPMG over the firm's involvement in the creation and promotion of allegedly illegal tax shelters: The government didn't dare file criminal...
Shoe drops on eight former KPMG partners
With its deferred prosecution agreement with the government finalized, the first criminal indictments were filed today against former KPMG partners in connection with the creation and promotion of tax shelters that still threatens the firm ability to survive as a...
KPMG - DOJ settlement done
The anticipated settlement of criminal charges over KPMG, LLP's creation and promotion of allegedly illegal tax shelters has been finalized between the accounting firm and the Department of Justice and will be announced on Monday. Here are the previous posts...
The Banks and KPMG
Following on this post from last week regarding a plea deal of a former banker who had promoted KPMG's tax shelters, this Wall Street Journal ($) article provides more information on the involvement of several banks -- namely UBS AG,...
KPMG rumbles with the McNair boys
This NY Times article has the skinny on the slobberknocking litigation that is taking place between harried but feisty KPMG and R. Cary and D. Calhoun McNair, sons of Houston Texans' owner Bob McNair, over tax shelters that KPMG allegedly...
More on criminalizing risk taking
Vic Fleischer over at the Conglemerate blog continues his campaign to increase the business of the white collar criminal defense bar with a couple of posts (here and here) in which he suggests that "financial engineering" of the type that...
The KPMG Memorandum
The KPMG tax shelter saga has been a common topic on this blog over the past year or so, and this recent post observed that -- even if KPMG fades a criminal indictment -- it is by no means clear...
KPMG noose tightens
On the heels of this post from yesterday, this NY Times article reports on the plea bargain of Domenick DeGiorgio, a 42 year old former managing director at the New York branch office of Munich-based HVB, (formally known as Bayerische...
KPMG strikes deal in tax shelter probe
You know that the criminalization of business in the post-Enron era has become routine when it's newsworthy that the government has decided not to use its prosecutorial power to prompt another Arthur Andersen-type meltdown of a major accounting firm. This...
You knew this was coming for KPMG
This Washington Post article reports that at least 20 former partners KPMG LLP -- including some who were members of its senior management team -- have been informed by the Justice Department that they are targets of the criminal investigation...
The effects of criminalizing auditors
This Wall Street Journal ($) article picks up on the theme of this post from late last year -- i.e., that the government's regulation of accounting firms through criminalization of their services is contributing to the shortage of accounting firms...
KPMG = Arthur Andersen?
Over this past weekend, this NY Times article reviewed the civil litigation and criminal investigation into KPMG's mass-marketing of dubious tax shelters from the late 1990's through late 2003. Here are the previous posts over the past year and a...
KPMG's tax shelter purge
These days, it seems as if a new interesting revelation from one of the big U.S. accounting firms occurs every few hours or so. This CBS Marketwatch snippet reports this morning that KPMG LLP fired Richard Smith, a senior executive...
KPMG's tax shelter woes mount
A 144-page Senate Permanent Subcommittee on Investigations report issued this past Thursday provided more embarrassing public disclosures of how the Big Four accounting firm KPMG mass-marketed dubious tax shelters from the late 1990's through late 2003. Here are previous posts...
WSJ on KPMG tax shelter investigation
This Wall Street Journal ($) article follows up on the status of the government's investigation into KPMG's tax shelter practice and emphasizes the involvement of lawyers (from the Wall Street firm, Brown & Wood) in the promotion of that practice....
KPMG tax shelter snags some big fish
A KPMG tax shelter that the Internal Revenue Service last year declared abusive snared a group of prominent American companies, reflecting the popularity of efforts to reduce corporate taxes has become. Here are earlier posts on KPMG's mounting problems relating...
The new definition of "cooperation"
This timely Wall Street Journal ($) article reports on the government's new pressure tactic in investigating and prosecuting business crimes -- pressuring businesses to condition the business' support of its employees who are under investigation on the employee's cooperation with...
Justice opens criminal inquiry into Ernst & Young tax shelters
This Wall Street Journal ($) article reports on the Justice Department's decision to open a criminal investigation into Ernst & Young LLP's promotions of potentially abusive tax shelters. This investigation follows on the heels of a separate criminal investigation into...
KPMG ordered to disclose tax shelter clients
This NY Times article reports on U.S. District Judge Thomas F. Hogan's order that KPMG turn over the names of its tax-shelter clients within 10 days pursuant to IRS summonses that were issued in 2002 (these matters take awhile to...
IRS can discover identity of KPMG tax shelter clients
This NY Times article reports on federal Northern District of Texas Judge Barefoot Sanders' decision yesterday that upheld the Internal Revenue Service's efforts to obtain the names of two KPMG clients who bought a tax shelter that the IRS contends...
IRS denounces KPMG promoted tax shelter
The Wall Street Journal ($) is reporting today that the IRS intends to challenge transactions that KPMG structured to shift tax obligations improperly to tax-exempt organizations, including charities, and away from shareholders of certain types of closely held corporations. Earlier...
WSJ on KPMG's tax avoidance problems
As noted in this earlier post, Big Four accounting firm KPMG is the subject of a Manhattan federal grand jury investigation into the sale of tax shelters to corporations and wealthy individuals who used them to escape at least $1.4...
KPMG hopes the NY U.S. Attorney doesn't see this
Charles O. Rossotti is a Republican businessman who was commissioner of the IRS for five years during the last part of the Clinton Administration and the first part of the Bush Administration. In this recent PBS interview , Rossotti told...
KPMG focus of tax shelter probe
The NY Times reports federal grand jury in Manhattan is investigating the sale of tax shelters by Big Four accounting firm KPMG to corporations and wealthy individuals who used them to escape at least $1.4 billion in federal taxes. This...
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