Ex-KPMG staff found guilty in US tax shelter case

After a two-month trial against three former KPMG executives on charges for helping wealthy clients evade millions of dollars in tax, a New York federal jury returned a mixed verdict yesterday, convicting two and acquitting one of the trio.

Convicted of tax evasion were Robert Pfaff, a partner, and John Larson, a senior manager, together with lawyer Raymond Ruble, a former partner at Brown & Wood. Winning acquittal was tax partner David Greenberg, Bloomberg reports.

The case, once touted as the biggest tax-shelter prosecution in US history, has shrunk since 2005, from initially accusing 17 ex-KPMG executives, including former KMPG deputy chairman Jeffrey Stein, and two others of helping wealthy Americans evade $2bn in taxes.

The case suffered a major setback in January 2007 when the district attourney dismissed charges against all but four defendants for violating the defendants' right to counsel by pressuring KPMG to withhold their legal fees, a ruling which was later upheld on appeal. Charges against New York-based KPMG were dismissed in January 2007 after it paid a $456m fine.

Further reading:

Ex-KPMG defendants walk away from tax-shelter case

Ex-KPMG execs seeks dismissal of tax shelter charges