A former KPMG LLP partner was sentenced to a year and a day in federal prison for his role in eliciting confidential information from the U.S. audit regulator (PCAOB) to boost the firm’s annual inspection results. David Middendorf, KPMG’s onetime national managing partner for audit quality and professional practice was convicted in March of multiple counts of fraud. Prosecutors said several former employees of the PCAOB helped funnel details about its inspection plans to leaders of KPMG, who used the information to change the audits.
Middendorf “was at the top of a chain of corruption that threatened to corrupt KPMG and the PCAOB’s inspections process,� Geoffrey Berman, the U.S. attorney in Manhattan, said in a statement Wednesday. “Today’s sentence recognizes the harm this fraudulent scheme caused to the PCAOB and the auditing profession more generally.� Prosecutors had urged the U.S. District Judge to send Middendorf, 55, to prison, arguing that in his position he could have stopped the scheme in its tracks. Lawyers for Middendorf asked the judge for probation, noting that their client wasn’t accused of stealing money and that he testified on his own behalf. On the stand, Middendorf admitting authorizing the revisited audits but said he wanted the firm to double-check its work.
Middendorf told the judge he had worked for KPMG for more than 30 years, took his responsibility as a protector of capital markets seriously and had simply made a mistake. “The consequences to me from this case are devastating,� Middendorf said.
While the sentence was well below the 57 months Middendorf faced under federal guidelines, the judge said “meaningful punishment� was necessary to help prevent others from engaging in similar conduct. The judge said that Middendorf was regarded as an “honest and respected professional� but knew what he was doing was wrong. “It is more subtle than stealing money. It involved corruption of a regulatory process.� The judge gave Middendorf a year and a day because a sentence of more than 12 months allows a prisoner to get credit for good behavior.
Some of the key facts to consider:
- Middendorf wasn’t accused of stealing money.
- Middendorf testified on his own behalf.
- Middendorf simply made a mistake.
- Federal guidelines suggested 57 months and he was sentenced to a year and a day. Middendorf will likely serve less time because he will get credit for good behavior.
Based on the information provided, was the sentence appropriate? If not, should he have gotten more time? Less time?Please use APA format and cite the text