One of the 19 defendants facing tax fraud charges over KPMG's sale of questionable shelters struck a surprise deal with federal prosecutors, copping to one count each of conspiracy and tax evasion.
David Rivkin, a tax partner in KPMG's San Diego office and one of the lower-level executives charged in the case, told a Manhattan federal court judge that the allegedly bogus tax shelters had been designed and approved by senior executives at the firm. He said that KPMG targeted wealthy clients interested in offsetting more than $20 million in capital gains as the target market for the shelters.
Rivkin said that he alone helped nine clients avoid paying taxes on $235 million f rom July 1999 through April 2004.
Rivkin was indicted in October and was among the defendants who joined a motion to challenge the basis of the government's case, as the question of the shelters' illegality has never been answered in court. Rivkin had also requested that his trial be moved to federal court in California.
He will face 10 years in prison, but could get less if prosecutors are satisfied with his cooperation. A tentative sentencing date was set for Feb. 9, 2007.
In October, a New York federal grand jury charged each of the 19 defendants with at least 39 counts of tax evasion and a single count of conspiracy to defraud the Internal Revenue Service. The grand jury also charged three of the defendants with obstructing government investigations, and one with evading his personal income taxes. The case, which prosecutors estimated may have cost the U.S. Treasury $2.5 billion, is the largest criminal tax case in U.S. history. In August, KPMG agreed to pay $456 million to avoid prosecution over its sale of abusive tax shelters.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access