Two current and two former partners of Ernst & Young have been charged with tax fraud conspiracy involving fraudulent tax shelters, reports the New York Times.

Ernst & Young, which has been under investigation over the bogus shelters is not off the hook but it could still reach a deal to avoid indictment and certain death.

What's interesting is that regulators are going for the individuals, not the firm.

Strong echoes here of the KPMG case, a tax shelter fraud that helped the wealthy escape $2.5 billion in US taxes.

Last week, a court ruled that KPMG did not have to fight over who should pay the legal fees of 16 former partners who are due to go on trial for selling the illegal shelters.

What does this tell us? First, that prosecutors and the Bush administration are going out of their way to ensure that the Big Four don't become the Big Three or Two.

And secondly, that prosecutors have the smell of blood. There should be plenty more of these sorts of cases ahead, particularly with claims that the Big Four are making millions of dollars helping their clients dodge tax by shifting their money into offshore havens, something I have looked at here.

Still, it's obvious that the big accounting firms are simply too big, and too few, to send to jail. They are now untouchable.