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KPMG reaches $456 million settlement to avoid prosecution for tax fraud

[JURIST] KPMG [corporate website] agreed to pay $456 million Monday in a settlement that will allow the accounting firm to avoid federal criminal prosecution for selling abusive tax shelters enabling wealthy individuals to evade income tax liabilities during 1996-2002. KPMG admitted the firm attempted to hide fraudulent tax shelters from the Internal Revenue Service [official website] and earlier this year said it took full responsibility for the unlawful conduct by former KPMG partners [KPMG press release, PDF; JURIST report]. Under the settlement agreement, former chairman of the US Securities and Exchange Commission [official website] Richard Breeden [profile] will serve as an independent monitor of KPMG for the next three years and the firm has agreed to pay out the $456 million by the end of 2006. Nine former partners of KPMG have also been indicted on related criminal charges and are expected to be arraigned later this week. Bloomberg has more.

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