10/19/20 update: This list is getting cumbersome to update and read. It has been reformatted and posted here. This post will not be updated after today. Check the newer post for all future updates.
Sometimes you gotta’ have a scorecard to keep track of the players and the story. After a former partner pled guilty this week in the fiasco at KPMG over leaking of PCAOB inspection targets, I had to sort out again who was who.
So, I sketched out a list of the players and a bit of info about each.
Will update this list as the criminal cases move forward.
The roster of players and their status:
Update: More info for Holder added on 10/31/18
Update 3/13/19: Conviction at trial on 3/11/19 for David Middendorf and Jeffrey Wada.
Update 8/9/19:
KPMG:
- (Update 6-15-19) SEC is considering a $50M fine against the firm. This would be a tie for the largest fine ever levied against an auditor. WSJ – 6/13/19- KPMG to Pay as Much as $50 Million to Settle SEC Probe (behind paywall).
| —–
Scott Marcello Former KPMG partner until ?? Vice Chair of Audit —– |
Not indicted
|
| David Middendorf
Former KPMG partner until 4/17 National Managing Partner for Audit Quality and Professional Practice Group, in Department of Professional Practice (DPP) Reported to Marcello age 55 in 12/19 —– |
1/22/18 – indicted 2/11/19 – scheduled trial date 3/11/19 – convicted on three of four felony counts; August 2019 – expected sentencing 9/11/19 – Sentencing scheduled – Sentenced to one year plus one day. 1/15/20 – Banned from practice before SEC. 1/16/20 – Has appeal of his conviction underway.
|
| Thomas Whittle
Former KPMG partner until 4/17 National partner-in-charge for Quality Measurement in DPP Reported to Middendorf age 56 in 12/19
—– |
1/22/18 – indicted 10/29/18 – guilty plea to five counts (wire fraud and conspiracy) 10/29/18 – agrees to cooperate with government 9/13/19 – scheduled sentencing, postponed 12/20/19 – sentencing scheduled 9/16/20 – still awaiting sentencing
|
| Chief Auditor
—– |
Not indicted
|
| David Britt
Former KPMG partner until 2/17 Co-leader, Banking and Capital Markets Group Reported to Chief Auditor age 55 in 12/19
—– |
1/22/18 – indicted 2/11/19 – scheduled trial date Update – 10/19 scheduled trial date; his trial was severed from trial of Mr. Mittendorf and Mr. Wada. 10/3/19 – pleaded guilty to one felony count of conspiracy wire fraud. 5/8/20 – scheduled sentencing 9/16/20 – sentencing is expected on 9/23/20 10/9/20 – no jail time, sentenced to 6 months home confinement, to be served after deportation to his native Australia
|
| Brian Sweet
Former KPMG partner in DPP, 4/15(?) to (?) Former PCAOB associate director 3/14 to 4/15 age 42 in 12/19
—– |
1/?/18(?) – guilty plea (conspiracy and wire fraud)
12/20/19 – sentencing scheduled 9/16/20 – still awaiting sentencing
|
| Cynthia Holder
Former KPMG executive director, 8/15 to 4/17 Former PCAOB Inspections Leader, 12/11 to 8/15
—– |
1/22/18 – indicted 10/16/18 – guilty plea (4 counts: 2 wire fraud, 1 wire fraud conspiracy, and 1 conspiracy to defraud U.S.) 4/5/19 – scheduled sentencing; prosecutors calculate could be 41 to 51 month sentence; postponed on 4/5/19 6/7/19 – postponed date scheduled for sentencing (per tweet by @TheNewsHam) 8/9/19 – Sentenced to 8 months in prison. Supervised release. Fine of $400. Subject to restitution with amount to be determined. Bureau of Prisons register number 35321-479. As of 11/20/19, scheduled release date is 6/30/20. 11/29/19 – Banned from practice before SEC. As of 1/26/20, scheduled release date is 6/13/20. 6/20/20 – released from custody per Bureau of Prisons
|
| Jeffrey Wada,
Former PCAOB Inspections Leader, 2/12 to 2/17 age 44 in 12/19
—– |
1/22/18 – indicted 2/11/19 – scheduled trial date 3/11/19 – convicted on three of four felony counts; August 2019 – expected sentencing 10/11/19 – Sentenced to 9 months in prison. Restitution to be determined. 12/24/19 – Bureau of Prisons register number 75835-112. Not in custody as of 12/24/19. 1/15/20 – Banned from practice before SEC. 4/6/20 – Not in custody. 9/16/20 – Appealing conviction
|
That means the current score is 3 felons, with 3 on deck 3 awaiting trial.
Update 3/13/19: Score is currently 1 on deck awaiting trial and 5 felons (guilty plea for 3, conviction at trial for 2).
Update 10/4/19: Score is 6 felons, 2 sentenced, 0 yet reported to jail.
Here are the news articles used to compile the above table:
- 1/22/18 – Caleb Newquist – Going Concern – Former KPMG Employees Learn That Using Confidential PCAOB Inspection Info Has Its Drawbacks
- 1/22/18 – Indictment; Count one, conspiracy to defraud the United State, count two, conspiracy to commit wire fraud, count three, wire fraud 2015; count four, wire fraud 2016; count five, wire fraud 2017.
- 1/22/18 – Caleb Newquist – Going Concern – All the Gory Details From the Indictment of Former KPGM Partners
- 10/30/18 – Jason Bramwell – Going Concern – Ex-KPMG Partner Pleads Guilty to Using Stolen PCAOB Inspection Information
- 10/30/18 – Francine McKenna – MarketWatch – KPMG partner Thomas Whittle pleads guilty to criminal charges in theft of regulatory data
- 10/30/18 – Michael Rapoport – Wall Street Journal – Former KPMG Partner Pleads Guilty in Scheme to Obtain Secret Regulatory Information
Update: More info for Holder:
- 10/17/18 – Jason Bramwell – Going Concern – Ex-KPMG Executive Director Admits Guilt in PCAOB Inspection Leak Scandal
Update 10/4/19:
- 10/3/19 – US Attorney’s Office, Department of Justice – Former KPMG Executive Pleads Guilty To Fraudulent Scheme To Steal Confidential PCAOB Information And Use That Information To Fraudulently Improve KPMG Inspection Results
- 10/3/19 – Going Concern – Another One of the ‘KPMG 5’ Has Pleaded Guilty In PCAOB Scheme
More updates:
- 9/17/20 – Going Concern – FYI: One of the “KPMG 5” is Scheduled to Be Sentenced on Sept. 23
Comment from Naked Capitalism after linking to post then quoting opening sentence: “Rather a lot of felonies for Big Four auditor, surely?”
Yes. Yes, it is rather a lot.
And stop calling me Shirley.
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