Dismissal of Tax Case Against Former KPMG Employees Upheld

NEW YORK -- A federal appeals court in Manhattan ruled Thursday that a criminal case against more 13 former KPMG employees was properly dismissed, the Associated Press reported.

The United States Court of Appeals for the Second Circuit said the federal government interfered with the global firm’s practice of providing legal assistance to its employees by pressuring KPMG to limit or end the practice, according to the AP.

The appeals court says the government’s overwhelming influence interfered with the rights of the employees to defend themselves, the AP said.

Judge Lewis A. Kaplan of Federal District Court in Manhattan had tossed out charges of fraud, tax evasion and conspiracy involving questionable tax shelters against 13 former KPMG employees last year. Charges remain against four others, according to the AP. Kaplan had ruled that prosecutors had violated the constitutional rights of the defendants by pressuring KPMG to cut off their legal fees, according to the AP.

The appeals court ruling came on the same day that the Justice Department announced plans to roll back the rules that were a central part of the KPMG charges, the AP reported.

-- NYSSCPA.org News Staff

Posted on 8/28/08