Legal Ethics

KPMG Prosecutors Claim Secret Defense Pact

  • Print

Prosecutors battered in an illegal tax shelter case involving accounting firm KPMG have turned the table on defense lawyers.

They claim that two lawyers for defendants who worked for Presidio Advisory Services may have had a secret joint defense agreement, the New York Times reports. The Presidio defendants are accused of promoting illegal tax shelters for KPMG.

Prosecutors contend that lawyers Steve Bauer and David Scheper may have given advice to Presidio employee David Amir Makov, even though they represented other Presidio defendants.

They want Judge Lewis Kaplan of New York City to determine whether the two defense lawyers should be removed from the case because of a conflict of interest. They are asking the judge to force the defense lawyers to testify under the crime-fraud exception to attorney-client privilege.

Makov has pleaded guilty to one count of conspiracy to commit tax fraud and agreed to repay $10 million, noted in an earlier post.

Lawyers for Makov told the Times that prosecutors were aware for three years of the meetings with other defense lawyers and they were not improper.

Prosecutors suffered a big setback in the case when Kaplan dismissed charges against 13 of 18 defendants in July because the government had pressured KPMG to cut off their legal fees.

Give us feedback, share a story tip or update, or report an error.