A federal judge has dropped the charges against 13 defendants in the KPMG tax shelter case.Judge Lewis A. Kaplan of the U.S. District Court in Manhattan blamed prosecutors for forcing the Big Four accounting firm to stop paying the legal fees of the 13 defendants and said their constitutional rights had been violated.

Three other KPMG defendants still face charges in the case, in which KPMG was accused of setting up criminal tax shelter schemes for clients that helped them evade over $2.5 billion in tax liabilities. Two other defendants who were never employed by KPMG also still face charges. The firm has already agreed to pay $456 million to avoid prosecution and to change its operations

Judge Kaplan said he made his decision reluctantly, but that the government's action forced him to dismiss the charges. By denying KPMG the ability to pay the defendants' legal fees, he said the prosecutors may have been depriving the defendants of the counsel of their choice and keeping them from presenting the defense case they wanted.

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