[Article updated with new sentencing date.]
A Manhattan federal court judge will decide next month whether former KPMG executive David Britt should spend some time inside a jail cell for his involvement in a scheme to steal secret audit inspection information from the PCAOB.
But if Britt, former co-leader of KPMG’s Banking and Capital Markets Group, is sentenced to prison on Oct. 9, his time in jail will likely be in the same ballpark of six months to one year like his former KPMG colleagues than the two to three years prosecutors originally agreed to under Britt’s plea deal.
Law360 reported on Sept. 15:
Federal prosecutors supported the efforts of a former KPMG partner seeking a leaner sentence after pleading guilty to an illicit auditing scheme, telling a New York federal court Tuesday that he should receive less prison time than the 27- to 33-month guidelines.
The offense committed by David Britt was “incredibly serious,” but case law and sentencing regulations allow the court to determine his sentence in line with those of his co-conspirators, who were “arguably more culpable” but received much lighter sentences, prosecutors argued in a sentencing memo.
“In light of the previous sentences handed down in this case, as well as the history and characteristics of the defendant, the government respectfully submits that a significant sentence, but one below the stipulated guidelines range of 27 to 33 months’ imprisonment, would be a fair and appropriate sentence in this matter,” according to the memo.
Britt was scheduled to be sentenced on Sept. 23; however, according to DocketBird.com, his sentencing was adjourned to Oct. 9 at 11 a.m. ET.
Britt pleaded guilty last October to one count of conspiracy to commit wire fraud for taking part in the stupid plan to illegally use confidential lists that contained information on which KPMG audits would be reviewed by the PCAOB to improve the firm’s atrocious audit inspection results.
The native of Australia said in a sentencing memorandum last week that prison time would be “cruel,” that his expected deportation to Australia was sufficient punishment, and that time served plus six months’ home confinement was appropriate, according to Law360.
Such a sentence would allow him to spend more time with his wife and three children, who have chosen to remain in the United States until the children finish college, Britt said.
He stressed that the U.S. has been his home for nearly 30 years and the only home his children have known.
“David is a first-time, non-violent offender who, until the charged conduct, led an upstanding and quiet life filled with family, community, and professional service,” his attorneys wrote. “That error in judgment, for which David pled guilty before this court wholly and without reservation, will haunt him for the rest of his life. Because of that error, David may never set foot in the United States again.”
Of the five ex-KPMG executives who were indicted and have either pleaded guilty or were found guilty by a jury for their roles in the scandal, two have received prison sentences.
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 appealing his conviction.
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, are both awaiting sentencing.
Ex-PCAOB staffer Jeffrey Wada, who provided Holder, a former colleague at the PCAOB, with confidential information on which KPMG clients would be inspected by the audit regulator in 2016 and 2017, 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.