Court Squashes One of Biggest Tax Fraud Cases in History

Get your news from a source that’s not owned and controlled by oligarchs. Sign up for the free Mother Jones Daily.


The AP reports that a judge has dropped charges against 13 former KPMG employees in what had been one of the largest criminal tax cases in U.S. history.

U.S. District Judge Lewis A. Kaplan said the dismissal was necessary because the government coerced KPMG to limit and then cut off its payment of the onetime employees’ legal fees….

The case resulted after the government investigated what it described as a tax shelter fraud that helped the wealthy escape $2.5 billion in U.S. taxes.

Kaplan said the Department of Justice “deliberately or callously” prevented many of the defendants from getting funds for their defense, blocking them from hiring the lawyers of their choice.

A spokeswoman for federal prosecutors, Yusill Scribner, told the AP the government “had no comment.”

A lawyer reader comments that the DOJ botched the case by overreaching in trying to an unusual degree to deny the defendants the ability to pay their lawyers. “This is a tactic the Justice Department started using under Ashcroft in white collar cases. It has been roundly criticized by civil libertarians, unions, defense counsel and many, many, federal judges. The policy was announced in the infamous Thompson memo, named after the Assistant Attorney General for the Criminal Division who issued it. It was so controversial that Justice recently announced it was withdrawing the memo. Too late for the largest criminal tax fraud case in history.

PLEASE—BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things it doesn’t like—which is most things that are true.

We’ll say it loud and clear: At Mother Jones, no one gets to tell us what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please do your part and help us reach our $150,000 membership goal by May 31.

payment methods

PLEASE—BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things it doesn’t like—which is most things that are true.

We’ll say it loud and clear: At Mother Jones, no one gets to tell us what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please do your part and help us reach our $150,000 membership goal by May 31.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate