Monday, July 16, 2007

Judge Kaplan's Decision to Dismiss 13 in KPMG Related Case

Hon. Lewis Kaplan issued a 64-page decision dismissing 13 of the individuals accused in an action tied to KPMG. He stated, "[t]he Court concludes that three of the defendants have not established that KPMG would have paid their defense costs even if the government had left KPMG to its own devices. The indictment therefore will be dismissed as to thirteen of the sixteen KPMG Defendants."

But rather than just accepting the prosecution's agreement to dismissal, the court went further and found a basis for "outrageous and shocking" action on the part of the prosecutors. The court stated,

"Just as prosecutors used KPMG to coerce interviews with KPMG personnel that the government could not coerce directly, they used KPMG to strip any of its employees who were indicted of means of defending themselves that KPMG otherwise would have provided to them. Their actions were not justified by any legitimate governmental interest. Their deliberate interference with the defendants’ rights was outrageous and shocking in the constitutional sense because it was fundamentally at odds with two of our most basic constitutional values – the right to counsel and the right to fair criminal proceedings. But the Court does not rest on this finding alone. It would reach the same conclusion even if the conduct reflected only deliberate indifference to the Defendants’ constitutional rights as opposed to an unjustified intention to injure them."

The court notes that "[t]he vice of the government's actions here was that the government improperly interfered with the payment of defense costs that KPMG otherwise would have paid, just as KPMG paid for a $20 million defense for four of its personnel in the Xerox case."

The court cites to a landmark passage from Berger v. United States and follows this with the following conclusion:

"The Department of Justice, in promulgating the aspects of the Thompson Memorandum here at issue, and the USAO in the respects discussed above and in Stein I, deliberately or callously prevented many of these defendants from obtaining funds for their defense that they lawfully would have had absent the government's interference. They thereby foreclosed these defendants from presenting defenses they wished to present and, in some cases, even deprived them of counsel of their choice. This is intolerable in a society that holds itself out to the world as a paragon of justice. The responsibility for the dismissal of this indictment as to thirteen defendants lies with the government.

Order -

Download 2007716_order_dismissing_as_to_13_def_for_viol_of_rights_to_counsel_2.pdf

Commentary to follow.

(esp)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2007/07/judge-kaplans-d.html

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» What is the sound of outrageous government? from Appellate Law
Look on p. 37-38 of Judge Kaplan’s latest KPMG opinion. He also dismisses a bunch of defendants because the Second Circuit won’t let him bring KPMG in to pay their legal fees. This decision is very interesting on many levels, [Read More]

Tracked on Jul 16, 2007 11:10:39 AM

» Judge Kaplan hammers the DOJ in the KPMG case from Houston's Clear Thinkers
As widely anticipated, U.S. District Judge Lewis Kaplan dismissed all charges today against 13 former KPMG partners in the KPMG tax shelter case pending in New York City because the prosecution's interference with the defendants' Constitutional rights ... [Read More]

Tracked on Jul 16, 2007 8:04:29 PM

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