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Sunday, June 16, 2024 | Back issues
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Ex-KPMG Partner Gets 5 Years

NEW YORK (CN) - A former partner at KPMG was sentenced Wednesday to nearly 5 years in prison for his role in a scheme to defraud the IRS and conceal millions of dollars of income that he got from tax shelter transactions.

Robert Pfaff pleaded guilty last September to concealing millions of fee income that he received from tax shelter transactions from the IRS and taxing authorities in Saipan, and for conspiring to defraud the United Micronesia Development Association in Saipan by sharing tax shelter fee income with officers of that company.

Those officers then failed to disclose secret payments to the Saipan company's board of directors, federal prosecutors said.

Between 1993 and 2002, prosecutors say Pfaff and co-conspirators in the Philippines and Norway participated in certain tax shelter transactions involving United Micronesia as a corporate taxpayer, generating millions of free income.

That money was then divided between Pfaff and other "designers, marketers and implementers of the tax shelter transactions," authorities said.

.Pfaff got more than $3.7 million in fee income between 1993 and 2000 for those transactions, officials said.

Pfaff and his co-conspirators then tried to hide receipt of tax shelter fee income from the IRS and Saipan's taxing authorities by sending millions of dollars to bank accounts in Manila, Philippines, authorities said.

Pfaff and others then paid Philippines co-conspirators to disburse the money from the Philippines bank accounts in accordance with their instructions, authorities said.

Authorities also say Pfaff and others created false documents to make it look like the fee income Pfaff got from the Philippines was part of a series of loans rather than Pfff's income.

Three co-conspirators, Chandler Moisen, Michael Grandinetti and Domenick Degiorgio, already have pleaded guilty for their role in the scheme. They await sentencing.

Pfaff, 59, is currently serving an 8-year sentence after being convicted on other charges.

Wednesday's sentence of 4 years and 9 months will run concurrently with the previous sentence.

Pfaff also was ordered to pay a little more than $1 million in restitution to the IRS, officials said.

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