UPDATE 8-29-05: Seven former KPMG partners and one former senior manager have been indicted. Follow this link for details.
Original 8-25-05 post:
Robert Fink said he expects his client, a former partner at KPMG whom he wouldn't identify, to be formally notified of the indictments in New York today or tomorrow. He wouldn't disclose his source of information about the charges or identify the other seven defendants. Fink said he believes the federal charges will likely include conspiracy to defraud the Internal Revenue Service, tax evasion and possibly obstruction of justice.
"My client has always believed that KPMG did legitimate tax planning that accountants throughout America were doing and that the government is distorting that into an alleged tax crime," said Fink, a partner at New York-based Kostelanetz & Fink. He said his client will plead not guilty to all charges and go to trial.
Meanwhile, the Wall Street Journal reports that former SEC Chairman Richard Breeden is the tentative pick to serve as "outside monitor" of KPMG under a still-pending "deferred prosecution" arrangement that would enabale KPMG itself to avoid indictment. From the Journal story (subscriber-only link):
Other provisions of a deferred-prosecution agreement likely would include new restrictions on the firm's tax practice and heightened government supervision, including Mr. Breeden's appointment as an outside monitor. Deferred-prosecution agreements, which have become more common, allow companies to avoid prosecution in exchange for adhering to certain conditions over time.
Interesting times for our profession.
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