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INDICTED EX-PARTER FLIPS IN TAX SHELTER CASE

March 27, 2006

David Rivkin, one of the 19 individuals indicted in the KPMG tax shelter case, entered a guilty plea today and agreed to cooperate with prosecutors:

Rivkin admitted that he conspired with others between January 1999 and May 2004 to prepare and execute false documents so that clients could file false tax returns.

He also admitted that he took steps to conceal the existence of fraudulent tax shelters from the Internal Revenue Service and avoided registering the shelters with the IRS by claiming attorney-client privileges.

In pleading guilty to conspiracy and tax evasion, Rivkin signed an agreement to cooperate with prosecutors, who could then ask the judge to consider giving Rivkin a more lenient sentence rather than the years he might face in prison. Sentencing was set for Feb. 9, 2007.

This is the first crack in the solid front of resistance of those indicted in the case. Expect the remaining defendants to say that the guilty plea was the result of irrisistable pressure by the prosecution.

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