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KPMG's indictment
Filed in archive Accounting by leon on March 23, 2008
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Late last year, I did a blog entry at how the US Government was not backing down on its determination to prosecute foremr KPMG partners for peddling dubious tax shelters. That was after Judge Lewis Kaplan had accused the US Government of abusing its power.

Now in the latest news, prosecutors have filed a separate charge against former KPMG partner Robert Pfaff. And as the New York Times notes, it's all designed to put pressure on the other KPMG defendants before they go to trial.

Professor Ellen S Podgor raises some important questions in the White Collar Crime Prof Blog: Why is the government filing a separate action when there already is a case pending against this defendant?(Excellent question) Did the prosecutors know of this alleged activity at the time of the filing of the initial charges, and only chose to file this action now in order to secure a prosecutorial advantage? Is this a case of the government trying to separate the accused from others charged with him, so that the government receives the benefit of moving ahead on trial on this individual alone? (Spot on!) Is this a situation of the government hoping to convict the individual so that he can be offered immunity and forced to testify against other actors? (Now that is an interesting one to consider!).

Still, on the face of it Pfaff does come across as stupid and greedy. And there seem to have been lots of people in on it. Read the court document, provided by the White Collar Crime blog, and judge for yourself:

"Between 1993 and 2000, Pfaff received, directly or indirectly, in excess of $3,750,000 of fee income from those tax shelter transactions...Pfaff used that fee income for various personal purposes including: to purchase his principal residence in Englewood, Colorado; to purchase his mother's home in Wisconsin; to purchase various automobiles, including a Porsche for himself, a Mercedes Benz for his sister, a Subaru for his wife; to purchase various interests in mutual funds; to fund various trusts for his children; to make gifts to family members; to pay initiation fees at his country club in or around Denver, Colorado; to renovate and landscape his Colorado home; to pay dentist bills; and to purchase a Steinway piano and Hawaiian artwork."

Permalink: KPMG's indictment
Tags: Robert  Pfaff  KPMG  tax  kpmg  kpmg+indictment  conrad+black  openads+delivery 
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