Federal prosecutors have indicted eight former executives of the accounting firm KPMG on charges of conspiring to defraud the government by selling questionable tax shelters that deprived it of billions of dollars in revenue.

Federal prosecutors have indicted eight former executives of the accounting firm KPMG on charges of conspiring to defraud the government by selling questionable tax shelters that deprived it of billions of dollars in revenue.

The indictment, made public today in United States District Court in Manhattan, is a major step in the Justice Department’s criminal investigation into such tax havens, devised by accounting firms in the late 1990’s to hide wealth in aggressive new ways.

Prosecutors also alluded to banks and other entities, hinting at the possibility of further indictments by the government. Several references to “a co-conspirator not named as a defendant herein” suggest that the government has had help with its investigation from an insider – most likely Domenick DeGiorgio, a New York executive of the German bank HVB who pleaded guilty earlier this month to tax fraud similar to that at KPMG.

Meanwhile, KPMG itself admitted to wrongdoing and agreed as expected to pay $456 million, sidestepping a criminal indictment that might have put it out of business.

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