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January 27, 2023

Jailed Ex-KPMG Executive Director Barred By the SEC Because Why Not?

Cynthia Holder, one of the “KPMG 5” who was sentenced to eight months in federal prison in August for her role in a scheme to steal confidential audit inspection information from the PCAOB, was “denied the privilege” of appearing or practicing before the SEC as an accountant, the commission announced on Nov. 29. The SEC order doesn’t say how long she is barred, but my guess is that it’s for a really long time.

Holder, 53, of Houston, was the first of the five indicted ex-KPMG executives who was given jail time. Along with spending eight months (probably less) in the slammer, she was also sentenced to two years of supervised release. She reported to prison on Oct. 15.

Holder, a former PCAOB inspections leader who later worked as an executive director at KPMG, 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.

As our friend James Ulvog first reported on his blog Attestation Update, Holder is serving time at a minimum security federal prison camp for women in Bryan, TX. Her current release date is June 13, 2020.

According to one review on the website, FPC Bryan seems like a great place to spend eight months of your life:

Everything in FPC Bryan is terrible. Honestly, I’m just grateful for the downtime to read. I’ve never experienced anything like this before. Never! I served eight years active-duty in the Army. I’ve been in the Federal Prison Camp for Women in Bryan and I’ve hated every minute.

There aren’t any good jobs in the Federal Prison Camp in Bryan Texas. I hate it.

The living quarters are bad. There is an open bay for the common areas. The women in the federal prison camp in Bryan sleep in four-people rooms. The rooms are about the size of a walk-in closet.

But hey, this person said all she ate were chips, candy, and candy bars, so the typical diet of many accountants and possibly KPMG executive directors.

The other two people who have been sentenced thus far—David Middendorf, former national managing partner for audit quality and professional practice at KPMG, and Jeffrey Wada, a former PCAOB inspections leader—don’t have a listing on the Federal Bureau of Prisons website, as of this afternoon.

Middendorf was sentenced in September to one year and one day in federal prison, while Wada was given a nine-month jail sentence in October.

And mark those calendars: More sentencings are scheduled for later this month. On Dec. 20, Thomas Whittle, former national partner-in-charge of inspections at KPMG, and ex-KPMG partner Brian Sweet will learn their fates, according to Ulvog. David Britt, former co-leader of KPMG’s Banking and Capital Markets Group, is supposed to be sentenced on May 8, 2020.

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