The most senior level former partner charged in the KPMG “steal the exam” fiasco was sentenced to one year and one day in prison for his role in the leak of PCAOB inspection targets. David Middendorf received a fraction of the 37-46 months requested by US Attorney office and 46-57 months recommended by the United States Probation Office.
Some articles to provide lots more info:
Wall Street Journal – Jean Eaglesham – 9-11-19 – Ex-KPMG Partner Sentenced to a Year and a Day in ‘Steal the Exam’ Scandal
Crain’s New York Business – Aaron Elstein – 9/11/19 – Former top KPMG partner gets a year and a day in prison – Article points out the sentence of a year plus one day means Mr. Middendorf is eligible for good behavior credit.
That credit is based on the number of full years. So a sentence of exactly year means no possible credit. The extra day means credit is available.
My understanding from previous research is the credit is 53 days for each full year.
That means he is eligible for release shortly after the 10 month point.
Article also gives a good overview of Mr. Middendorf as the driving force for using the leaked information. He leaned hard on Mr. Sweet to provide info.
Going Concern – Jason Bramwell – 9/11/19 – Ex-KPMG Partner David Middendorf Was Spared a Lengthy Prison Sentence.
Law360 – Jody Godoy – 9/11/19 – Ex-KPMG Partner Gets Year In Prison For Regulatory Fraud – Article explains Mr. Middendorf is still unrepentant: he admits he made mistakes but does not believe he committed any crimes. He plans to appeal.
On the other hand, if one wants to have a chance at winning on appeal, the one needs to continually deny guilt.
The judge ruled again, as in the Holder case, that the list of inspection targets was “property” and that the value of the loss to PCAOB was the time they spent addressing the leak, which PCAOB calculated at $830,000.
Department of Justice press release – 9/11/19 – Former KPMG Executive Sentenced For Scheme To Steal Confidential PCAOB Information.
4 thoughts on “Second sentencing in KPMG fiasco of getting list of PCAOB inspection list.”
I’m getting a 404 error on this.
Try again. I wanted it to appear this morning but accidentally hit post last night. Took it off line. Should be visible now.
Thanks for pointing out it wasn’t visible.
It is interesting that they were looking for probation because no money was stolen, as they said. As long as I am not making money, the corruption is okay?
Keep in mind that is an argument from defense counsel, whose purpose is to keep his client out of jail. So I guess if that is one of several lines to take that might just help, it makes sense to give it a try.
On the other hand, your comment is correct. The idea in play is that there was no direct personal enrichment so jail time is not appropriate.
That the reputation of KPMG is further tarnished, folks barely paying attention to this issue likely wonder if the other 3 large firms may be doing the same thing, the integrity of the PCAOB agency and all its employees can be challenged, the integrity of the audit profession is stained, government employees were bribed, and others paying only slight attention who think there is a two-tiered justice system have their opinion reinforced is apparently of no concern.
Thanks for taking the time to read and comment!