I’m not a trial lawyer. In fact, there are many, many things that I’d prefer to do than be lead counsel at a trial: sleep on a bed of nails, summer in the swamps of Louisiana, have dinner with Scarlett Johansson (I have a hate/hate thing for her)…
Get the picture?
With that, I try not to be too critical of trial lawyers’ strategies because I figure this is something that they do and, well, they know better.
But this KPMG trial? What is going on with those guys?
Last year, Judge Lewis Kaplan dismissed charges against thirteen defendants (Randy Bickham, Larry DeLap, Jeffrey Eischeid, Steven Gremminger, Carl Hasting, John Lanning, Gregg Ritchie, Richard Rosenthal, Richard Smith, Carol Warley, Mark Watson, Philip Wiesner and Jeffrey Stein), because of alleged constitutional violations by prosecutors. And now, two executives have asked Judge Kaplan to declare a mistrial, alleging that the prosecution has changed its theory midway through the trial, making it impossible to defend. The judge has not yet ruled on that motion.
Are they right? I don’t know. C’mon, though. Have you ever seen such a circus? This trial started out with 19 defendants in what was said to be a “sure thing” for the feds. It is now down to 4 defendants, half of which are clamoring for a mistrial. I know there’s a lot at stake here but I cannot wrap my head around how the prosecution could let this much go awry. The race to convict those responsible for the “largest tax fraud ever” is now just a pathetic muddle.
Wow. And just like that, the largest criminal tax case in the US is over. Well, for now.
Judge Lewis A. Kaplan, of Federal District Court in Manhattan, has dismissed the charges against thirteen defendants (Randy Bickham, Larry DeLap, Jeffrey Eischeid, Steven Gremminger, Carl Hasting, John Lanning, Gregg Ritchie, Richard Rosenthal, Richard Smith, Carol Warley, Mark Watson, Philip Wiesner and Jeffrey Stein) because of alleged constitutional violations by prosecutors. Charges against three defendants (former KPMG partner David Greenberg, and two former KPMG employees, Robert Pfaff and John Larson) still stand since those employees could not prove that KPMG would have paid their legal fees in the first place.
In June, defendants asked the judge to throw out the charges based on allegations that prosecutors overstepped their roles by pressuring KPMG not to pay legal fees for the accused. Judge Kaplan obliged, writing that he made his decision “only with the greatest reluctance.”
The most damaging evidence came in the form of a voice mail from then-KPMG Chief Executive Officer Gene O’Kelly who said any “present or former members of the firm asked to appear will be represented by competent counsel at the firm’s expense.” Later, the firm bowed to pressure from the government to stop paying legal costs for the defendants in the criminal matter; KPMG continued to pay the legal fees for many of the same defendants in civil matters. This, the judge ruled, was a violation of substantive due process even if the government did not intentionally set out to do harm.
It was immediately clear that the government will pursue an appeal. In a statement, Southern District U.S. Attorney Michael Garcia said that the government “respectfully disagrees with Judge Kaplan as to whether there was any constitutional violation in this case…We will continue to pursue appellate review.” And why wouldn’t they? This was their big “we’ll show you” moment and they apparently blew it.
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