Ex-KPMG Partner Pleads Guilty to Client Tax Evasion

Stephen Harris

30 March 2006

David Rivkin, a former US-based KPMG tax partner has admitted helping wealthy investors evade millions of dollars in taxes with fraudulent documents, sham companies and phony tax shelters, according to an Associated Press report. Mr Rivkin has agreed to cooperate in what the US Department of Justice has called the largest criminal tax case ever. "The object of the conspiracy was to help wealthy taxpayers significantly and illegally reduce their tax liability to the US Internal Revenue Service so that they could keep the money for themselves instead of paying the taxes they owed," admitted Mr Rivkin to a New York court. Mr Rivkin worked at KPMG’s San Diego office as a member of its Innovative Strategies Group.The court heard that he was told prior to a marketing meeting with potential clients in Dallas in May 1999 that he was to target individuals with more than $20 million in capital gains for the firm's tax shelters. KPMG prepared and approved an opinion letter to be given to each of the clients describing the tax shelters as legitimate when they were not. Mr Rivkin is charged, along with 18 others with conspiracy last year in a tax scheme that the US government alleges helped affluent KPMG clients escape $2.5 billion in taxes. He told the court that the conspiracy was also meant to ensure "KPMG and other entities could earn significant fees."