culture, politics, commentary, criticism

Tuesday, October 18, 2005
$2.5 billion in illegal tax shelters and Bill Frist. The KPMG illegal tax shelter story keeps growing (
WSJ):
The government added 10 defendants to its indictment in the KPMG LLP tax-shelter investigation, including the Big Four accounting firm's former chief financial officer, bringing the number of people charged in the case to 19.

In a superseding indictment that is believed to be the largest criminal tax case ever filed, a federal grand jury in New York yesterday charged each of the 19 defendants with at least 39 counts of tax evasion and a single count of conspiracy to defraud the Internal Revenue Service. Additionally, it charged three of the defendants with obstructing government investigations, and one with evading his personal income taxes.

Seventeen of the 19 defendants are former KPMG tax professionals. The 10 newly added defendants include Richard Rosenthal, 49 years old, a former KPMG chief financial officer; Steven Gremminger, 55, a former KPMG associate general counsel; Larry DeLap, 62, formerly the partner in charge of KPMG's department of professional practice for tax; and Gregg Ritchie 48, a former division head in KPMG's tax practice.

[...]

The case centers on four types of allegedly fraudulent tax shelters that KPMG sold from 1996 to 2002 to about 600 wealthy individuals; the shelters generated about $2.5 billion in tax savings.
In this context, "$2.5 billion in tax savings" is a euphemism for "$2.5 billion stolen from the US Treasury."

But there's another politically charged part of the Journal's story that is missing: that one of the KPMG's "wealthy individual" clients for these abusive tax shelters was Bill Frist: "For every $1 KPMG collected for its 'bogus' shelters for Frist and Co., an extra $11 was taken from your pocket in the form of taxes deflected to the middle class."

UPDATE: Forbes reports that the KPMG clients included Thomas F. Frist III, a nephew of Sen. William H. Frist (R-TN), while Bloomberg reports that Thomas Frist III is the brother of Senate Majority Leader Bill Frist.

Because of HCA, the corporation to which they're all connected and because of which Frist is currently being investigated, it appears that the illegal KPMG tax shelters will probably turn out to be a significant corollary — as additional evidence of the Frists being conniving, thieving bastards if nothing else.

Martha Stewart went to jail for so much less.
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