The Work

April 2, 2009 11:30 AM

Lawyer to Serve Six-and-a-Half Years in KPMG Tax Fraud Case

Posted by Zach Lowe

The KPMG tax fraud case will most likely be remembered for a federal judge's decision to dismiss charges against 13 of 19 defendants after revelations that prosecutors had wrongly pressured KPMG against paying the defendants' legal bills. But the same judge--Lewis Kaplan of federal district court in Manhattan--came down hard on the three defendants who took their cases to trial and lost, according to this wrap-up from the New York Law Journal, an Am Law Daily sibling publication. 

One former senior exec at KPMG (John Larson) will serve ten years and one month in prison; another, Robert Pfaff, will serve eight years and one month, the NYLJ says. The lawyer at the center of the alleged scam, Raymond R.J. Ruble, formerly of Sidley Austin and Brown & Wood, got hit with a six-and-a-half year prison sentence for writing letters that blessed the bogus tax shelters KPMG accountants created for wealthy customers.

As we've written before, Ruble wrote about 600 such letters between the late 1990s and 2003, and was paid up to $50,000 for each letter.

Ruble technically faced up to 50 years in prison after a jury found him guilty on ten counts of tax evasion, but, realistically, the sentence was never going to approach that number. The Am Law Daily reached out to Ruble's attorney, Jack Hoffinger of Hoffinger, Stern & Ross, to see whether Hoffinger was surprised by the length of Ruble's sentence. Hoffinger was not immediately available for comment.

Larson and Pfaff were remanded for custody; Ruble was allowed to remain free pending appeal, the NYLJ says. We'll also ask Hoffinger about Ruble's plans to appeal once we connect with him. 

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