KPMG LLP, the fourth-largest U.S. accounting firm, and lawyers Sidley Austin Brown & Wood have agreed to pay $225 million to settle a suit claiming they fraudulently sold customers abusive tax shelters, court papers show.
KPMG and Sidley Austin Brown & Wood will pay $195 million to a group of former clients who bought four tax shelters that were disallowed by the U.S. Internal Revenue Service. Lawyers at Brown & Wood, which later merged with Sidley & Austin, signed off on the shelters as valid.
Last month, KPMG agreed to pay $456 million to avoid criminal prosecution over its sale of abusive tax shelters. Eight of the firm’s former partners were charged with fraud. A former Sidley partner was also charged.
Under the accord reached this week in federal court in Newark, New Jersey, a special master will determine how much of the settlement each plaintiff will receive.