Prosecutors in the US have admitted that dismissing chargers against former partners of KPMG - involved in an illegal tax shelter scheme – may be the only way to deal with violations of their constitutional rights.
In a documents filed to a US court on Friday, prosecutors of the US Attorney's office in Manhattan said that dismissal of the charges against at least four former partners of the accounting firm and two other defendants would not be appropriate.
This comes after US District Judge, Lewis Kaplan, ruled last year that the government had unconstitutionally pressured the firm into an arrangement that saw the defendants' rights to a fair trial and assistance of counsel violated, CNNMoney.com reported.
In response to alelgations that KPMG's former partners helped cheat government of $2.5bn in taxes, through the use of tax shelters, the firm came to a $456m settlement agreement to avoid being indicted, and also withheld payment of legal fees of the former partners.
The former partners filed documents asking for the charges to be dismissed, with which prosecutors now agree.
'Based on the government's analysis of the court's prior ruling and on extensive legal research, we have concluded that the defendants are correct in their assertion,' the prosecutors wrote.
Prosecutors, however, asked the court to not dismiss charges against former KPMG partners , John Larson, Robert Pfaff and Gregg Ritchie, who had at least significant portions of their legal fees paid by entities other than KPMG.
A fourth partner, David Greenberg, had a termination agreement with the firm, in which he waived rights for future legal costs from KPMG.
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