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 the Justice Department to indict, including the firm’s former chief financial officer and its former Associate General Counsel. Here are the previous posts on the KPMG tax shelter saga.
Federal prosecutors had a federal grand jury in New York yesterday charge the 10 defendants and the nine previous ones in a superceding indictment (copy here, courtesy of the TaxProf blog) with at least 39 counts of tax evasion and a single count of conspiracy to defraud the Internal Revenue Service. Three of the defendants are also charged with obstructing government investigations, and 17 of the 19 defendants are former KPMG tax professionals.

Continue reading →

As predicted here last week, Refco Inc. filed a chapter 11 case yesterday and announced late in the evening that an investment consortium led by private-equity fund J.C. Flowers & Co. LLC and Texas Pacific Group would seek Bankruptcy Court approval of a bid to buy Refco’s key regulated futures-trading unit
The regulated futures business that the consortium wants is a key component of Refco. Before the run on bank with regard to Refco’s business over the past week, the firm was one of the most active trading firms in the commodities and financial futures markets. Over the past week, Refco customers — typically hedge funds, individuals and institutions — had removed at least 20% of the assets from Refco’s futures brokerage business, which previously had about $4.1 billion in customer assets under management. That’s a big run on the bank in anyone’s book.

Continue reading →