Court upholds dismissal of KPMG partner charges

USA’s Court of Appeals for the Second Circuit has upheld the dismissal of criminal charges against 13 former executives at KPMG LLP, agreeing prosecutors violated the defendants' rights by putting pressure on the accounting firm to refrain from paying their partners’ legal bills.

The decision, by the US Court of Appeals for the Second Circuit, also deals a blow to what was once touted as the biggest-ever criminal tax prosecution, according to the Guardian.

Several other defendants in the tax fraud case who were not part of the appeal will still go on trial, but the case is now much smaller than it was when first publicised in 2005.

Although KPMG itself was not a defendant, it agreed in 2005 to pay $456m (₤250m) to settle a federal probe into improper tax shelters, which the former KPMG partners and others had been accused of setting up for wealthy clients and concealing them to cheat the US government out of $2.5bn.

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