Ex-KPMG defendants walk away from tax-shelter case

A series of setbacks have effectively left US Federal prosecutors with no
choice but to drop their last chance to revive criminal tax-shelter proceedings,
once labelled as the biggest in history, against 13 of the 19 original

Most of those charged were from
KPMG, including a former
vice chairman of the firm, who were indicted in 2006 on charges of conspiracy,
tax evasion and fraud in relation to the most aggressive tax shelters sold to
wealthy Americans over the late 1990s through early 2000, according to reports
in The New York Times. They will walk away from the case unpunished.

Two defendants have already pleaded guilty and the four remaining are now
standing trial in Federal District Court in Manhattan in a case which has been
reduced to a shadow of its former self.

In 2006, Judge Lewis Kaplan of Federal District Court in Manhattan threw out
charges against the 13 defendants, on the grounds that prosecutors had violated
their constitutional rights by pressuring KPMG to stop paying their legal fees.
The dismissal was upheld in August by an appeals court.

Further reading:

Court upholds dismissal of KPMG partner charges

The New York Times story

Related reading

Life Belt with Computer Folders