A high-ranking partner at accounting giant KPMG pleaded guilty to helping fabricate $11.2 billion in fake tax shelters so America’s wealthiest families could beat income taxes.
The guilty plea yesterday in Manhattan federal court of David Rivkin, 42, could mean a devastating blow to a gang of 16 accounting execs at KPMG charged in the massive tax shelter scam.
David Rivkin copped to conspiracy and tax evasion charges in Manhattan Federal Court and agreed to help prosecutors nail 16 other KPMG partners who have been indicted in the massive tax shelter scam.
Rivkin was one of 19 indicted in the case last year.
“I conspired … to market tax shelters,” Rivkin told Judge Lewis Kaplan.
Rivkin, wearing a light gray suit and sitting on the edge of his chair, said the bogus tax shelters were “designed and approved by senior executives” at the accounting giant.
Rivkin admitted he created phony tax losses for his clients that were designed to reduce the taxes they would have to pay.
“I knew that the losses should not have been claimed on tax forms,” he said.
Rivkin, 42, was a tax partner in KPMG’s San Diego office. He told Kaplan he began peddling phony tax shelters after attending a meeting with KPMG bosses in Dallas in 1999.
He said he was shown a power point presentation and given a list of prospective wealthy clients to approach about the bogus tax shelters.
KPMG targeted individuals who were interested in offsetting over $20 million in capital gains, he said.
He did not identify his clients.
Rivkin faces 10 years in prison, but could get much less than that if prosecutors are happy with his cooperation.
A tentative sentencing date was set for Feb. 9, 2007.
The phony tax shelters helped 501 rich clients evade $2.5 billion in taxes, the settlement papers state.