Wednesday, March 19, 2008

New KPMG Related Indictment

The former KPMG partner is charged with "participating in a conspiracy to defraud the IRS by [allegedly] concealing fee income received by [the accused] and his co-conspirators from tax shelter transactions."  He is "also charged for [allegedly] conspiring to defraud a company located in Saipan .... of the right to the honest services of its employees, by sharing tax shelter fee income with officers of that company who failed to disclose those secret payments to the Saipan Company's Board of Directors."

This individual, according to the government, "is currently awaiting trial before Judge Lewis A. Kaplan on charges relating to other tax shelters not at issue in today's indictment."

Some questions that are likely to arise are: Why is the government filing a separate action when there already is a case pending against this defendant? Did the prosecutors know of this alleged activity at the time of the filing of the initial charges, and only chose to file this action now in order to secure a prosecutorial advantage? Is this a case of the government trying to separate the accused from others charged with him, so that the government receives the benefit of moving ahead on trial on this individual alone?  Is this a situation of the government hoping to convict the individual so that he can be offered immunity and forced to testify against other actors?  There are clearly a good number of unanswered questions here, and one has to think that motions made by defense counsel will bring to light some of the answers to these questions.  For more see Business Week here.

(esp)

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