Ex-KPMG exec gets jail for scheme to game regulators

David Middendorf was convicted of wire fraud charges back in March

A former KPMG executive has been sentenced to a year in prison for his role in a scheme to get advance warning about which audit files U.S. audit regulators were planning to review.

The U.S. Attorney’s Office for the Southern District of New York announced that the former head of KPMG’s national office, David Middendorf, who was convicted of wire fraud charges back in March, has been ordered to serve a year and a day in prison by a U.S. district court judge.He was also sentenced to three years of supervised release.

Middendorf was convicted for his part in a scheme to boost KPMG’s performance in reviews by audit regulator the U.S. Public Company Accounting Oversight Board (PCAOB), by obtaining confidential information from current and former employees at the regulator about the KPMG audits that the PCAOB was planning to review.

“As the head of the KPMG department responsible for the quality of its audits, David Middendorf was at the top of a chain of corruption that threatened to corrupt KPMG and the PCAOB’s inspections process. Today’s sentence recognizes the harm this fraudulent scheme caused to the PCAOB and the auditing profession more generally,” said Manhattan U.S. attorney Geoffrey Berman.

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