The KPMG tax shelter case got underway with jury selection and a drastically reduced set of defendants.
The case was considered the largest tax fraud case in history when the Justice Department filed charges in 2005 accusing the defendants of helping clients avoid $2.5 billion in taxes. But 13 defendants had their charges dismissed in July of this year after the presiding judge, Lewis A. Kaplan, ruled that the government had interfered with their right to the counsel of their choice by pressuring KPMG not to pay for their legal expenses (see Judge Drops KPMG Charges). Another defendant, David Amir Makov, an investment advisor with Presidio Advisory Services, pleaded guilty in September.
Three former executives at the Big Four firm still face charges in the case, along with a lawyer who assisted with setting up the tax shelters. KPMG has already agreed to pay a fine of $456 million and to cooperate with prosecutors.
The three former KPMG employees are David Greenberg, Robert Pfaff and John Larson. The other defendant is Raymond Ruble, formerly a partner at law firm Sidley Austin. The defendants have argued that they participated in selling legal tax shelters, not in engaging in a criminal conspiracy.
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