Brexit & EconomyPoliticsKPMG US tax shelter case postponed

KPMG US tax shelter case postponed

Judge dismisses former KPMG partner's lawyer over conflict of interest issue

The judge presiding over the US
KPMG tax shelter
case
has disqualified the lawyer of one of the defendants, over a conflict
of interest issue.

Federal judge Lewis Kaplan disqualified Steven Bauer – representing former
KPMG partner John Larson – because the lawyer previously represented a colleague
of Larson’s in the same case.

Bauer provided legal advice to another defendant in the case,
David Makov – an adviser working outside of KPMG – who
last month pleaded guilty and agreed to cooperate with prosecutors, the
New
York Times
reported.

Makov’s testimony is also expected to strengthen the prosecution’s case
against Larson, one of 19 people charged in 2005 with fraud, tax evasion and
conspiracy involving the creation and sale of tax shelters, which tax officials
say amounted to non payment of about $2.5bn in tax.

In July, Kaplan dismissed charges against 13 defendants, ruling that their
constitutional rights were violated by prosecutors who pressured KPMG into
cutting off payments for their legal fees. The prosecution is now appealing the
ruling.

Further reading:

Judge kicks outs case against 13 ex-KPMG executives

‘Improper’ pressure heaped on ex-KPMG partners

KPMG ‘co-operated’ by not paying legal
fees

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