U.S. District Judge Lewis A. Kaplan in Manhattan today dismissed federal criminal charges against 13 people who worked at KPMG LLP because, he held, the government unconstitutionally coerced the firm not to pay their legal fees. WSJ story here; NYT here. The decision stemmed from the Second Circuit’s rejection, in May 2007, of Judge Kaplan’s attempt to remedy the violation by requiring KPMG to reimburse past fees and pay future ones. Blawgletter post here.
The case, over aggressive tax shelters, will continue as to three ex-KPMG partners and two people who worked elsewhere.