Adrienne mentioned this in Footnotes on Friday, but just in case you missed it, former KPMG partner David Britt won’t be serving any time behind bars for his role in the audit firm’s scheme to cheat the PCAOB inspection process a handful of years ago. Instead, Britt, 57, who is a resident of North Carolina, will serve six months of home confinement and be banished to his native Australia.
According to Law360, U.S. District Court Judge J. Paul Oetken opted on Oct. 9 for a probationary sentence that includes home confinement instead of the “significant sentence” requested by the Manhattan U.S. Attorney’s Office because Britt didn’t take any direct payment during the scheme:
“The conduct in the case was serious. [But] it did not involve direct personal gain to the defendant unlike in a typical fraud case,” Judge Oetken said of Britt. “He is someone who has made positive contributions to the people around him. I do not believe that the defendant poses a risk of recidivism.”
Prosecutors had preferred Britt serve some time in prison for his misdeeds but not as long as the 27- to 33-month guidelines had called for.
Britt, who was a co-leader of KPMG’s Banking and Capital Markets Group, pleaded guilty to one count of conspiracy to commit wire fraud on Oct. 3, 2019.
But of the three former KPMG executives who’ve been sentenced thus far for their blatant disregard of professional ethics, Britt is the only one not given jail time.
Cynthia Holder, a former PCAOB inspections leader who later worked as an executive director at KPMG, was sentenced to eight months in federal prison on Aug. 9, 2019. She had pleaded guilty to one count of conspiracy to defraud the United States, one count of conspiracy to commit wire fraud, and two counts of wire fraud on Oct. 16, 2018. Holder reported to jail on Oct. 15, 2019, and served her sentence at a minimum security federal prison camp for women in Bryan, TX. According to the Federal Bureau of Prisons website, Holder was released from custody on June 13.
David Middendorf, former national managing partner for audit quality and professional practice at KPMG, was sentenced on Sept. 11, 2019, to one year and one day in federal prison, exactly six months after he was convicted by a jury on three counts of wire fraud and one count of conspiracy to commit wire fraud. Middendorf is currently appealing his conviction.
The other two KPMG execs who were indicted in the scheme—Thomas Whittle, former national partner-in-charge of inspections at KPMG who pleaded guilty last Oct. 29 to wire fraud and conspiracy charges as part of a plea agreement with the government, and ex-KPMG partner Brian Sweet who pleaded guilty to conspiracy and wire fraud charges and also cooperated with the government—are both awaiting sentencing.
And we can’t forget about Jeffrey Wada, the ex-PCAOB inspections leader who provided Holder, a former colleague at the PCAOB, with secret information on which KPMG clients would be inspected by the audit regulator in 2016 and 2017. He was given a nine-month jail sentence last October after he was found guilty by a jury in March 2019 of one count of conspiracy to commit wire fraud and two counts of wire fraud.
Wada also is appealing his conviction.
No Prison For Ex-KPMG Exec Who Misused Accounting Info [Law360]
Related articles:
All the Gory Details From the Indictment of Former KPMG Partners
Another One of the ‘KPMG 5’ Has Pleaded Guilty In PCAOB Scheme
FYI: One of the ‘KPMG 5’ Is Scheduled to Be Sentenced on Oct. 9
How is he being banished to Australia if he’s a U.S. citizen? (U.S. Citizens can’t be deported….)
Yeah that was my bad. Meant to say resident instead of citizen.
I distinctly remember being on one of the audits that was selected by the PCAOB and I kept hearing that we “knew we were going to be selected” somehow. All this has been strange to read over the years.
KPMG is full of liar and cheater
It is a joke. Many of us have been subject to home confinement for 6 months. This guy gets off free while the others are serving some jail time.
And the worker bees get mandatory compliance training shoved down our throats due to the dirty deeds the big guys get caught doing. No justice