An appeals court has affirmed the dismissal of indictments against 13 former KPMG partners and employees in a tax fraud case involving tax shelters set up by the firm for clients.

"We affirm the district court's ruling that the government deprived defendants-appellees of their right to counsel under the Sixth Amendment by causing KPMG to place conditions on the advancement of legal fees to defendants-appellees, and to cap the fees and ultimately end them," wrote the U.S. Court of Appeals for the Second Circuit in a 68-page opinion.

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