Judge Says U.S. Violated KPMG’s Rights
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A federal judge ruled the Justice Department violated the rights of 16 former KPMG LLP executives accused of selling illegal tax shelters by pressuring the no. 4 American accounting firm to stop paying their legal defense fees.
U.S. District Judge Lewis Kaplan, who is overseeing the prosecution of the KPMG executives, including former Deputy Chairman Jeffrey Stein, said the firm “got the message” when prosecutors told it legal fee payments on behalf of the group would figure in any decision to criminally prosecute KPMG itself.
The government “let its zeal get in the way of its judgment,” Judge Kaplan wrote in today’s ruling in New York federal court. “It has violated the Constitution it is sworn to defend.”
The opinion calls into question Justice Department tactics in white-collar prosecutions often criticized by business groups as heavy-handed.
