November 26, 2020

Ex-KPMG Partner Thomas Whittle Is Up Next For Sentencing In PCAOB Scheme

Former KPMG partner Thomas Whittle—one of the five decision-makers at the House of Klynveld who were indicted in January 2018 for making the very poor decision to steal confidential information on which clients’ audits the PCAOB would be reviewing so KPMG could improve its dismal inspection results—is scheduled to be sentenced on Dec. 2, according to Law360.

The feds, though, asked U.S. District Court Judge J. Paul Oetken to cut Whittle some slack because he cooperated with the government in 2018 and provided information about “significant conversations about which the government was otherwise unaware,” Law360 reported:

“Whittle provided detailed, specific information about his own conduct and that of his coconspirators. Whittle never attempted to excuse or justify his behavior,” prosecutors said. “From the beginning, he accepted full responsibility for his criminal conduct.”

The government also said Whittle should be ordered to pay about $973,000 in restitution, jointly and severally with other defendants.

The Manhattan U.S. Attorney’s Office noted in its sentencing memorandum that guidelines call for a sentence of 27 to 33 months. But the government made no specific sentencing request, and instead urged that Whittle’s sentence reflect his substantial assistance to the government and be below the statutory minimum.

Whittle, who was national partner-in-charge of inspections at KPMG, pleaded guilty on Oct. 29, 2018 to wire fraud and conspiracy charges as part of his plea agreement with the government. Brian Sweet, another ex-KPMG partner who also cooperated with the government as part of his plea deal, has yet to be sentenced.

The other three members of the “KPMG 5” have already been sentenced.

Cynthia Holder, a former PCAOB inspections leader who eventually got a job 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.

Most recently, David Britt was sentenced last month to six months of home confinement and ordered to be deported to his native Australia to serve his punishment. 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.

The only non-KPMGer who was indicted, Jeffrey Wada, 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 was a former PCAOB inspections leader who gave Holder, a former colleague at the PCAOB, the secret information on which KPMG clients would be inspected by the audit regulator in 2016 and 2017. He also is appealing his conviction.

Feds Urge Leniency For Ex-KPMG Partner [Law360]

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