U.S. Judge Denies Bail to Former KPMG Executive

A federal judge in Los Angeles denied bail Thursday to David Greenberg, a 46-year-old tax accountant indicted in the KPMG tax shelter case, authorities said.

The U.S. attorney’s office had argued against granting bail, saying at a hearing Wednesday that Greenberg was a flight risk and had urged a government witness in the case to lie to prosecutors.

On Thursday, Judge Andrew J. Wistrich said he believed that the government had made a strong case and ordered Greenberg to remain in custody pending trial, Assistant U.S. Atty. Sandra Brown said.

Greenberg’s attorney, John Nassikas, could not be reached for comment late Thursday.

Nassikas has offered to pledge $8 million in property owned by Greenberg and his ex-wife as security if bail was granted, Brown said. She said that would have left Greenberg with $14 million of his own money.

His ex-wife, Laura Greenberg, who owned two of the properties offered as bail, would still have $7 million in her own name and is a trustee of a $9-million account for the benefit of the estranged couple’s children.

Brown said that Laura Greenberg had received just $3,000 a month in alimony in the couple’s 1997 divorce agreement. However, after David Greenberg realized he was a target in the government’s tax fraud case, he transferred $4 million in property to her, Brown said.

Greenberg was one of 10 people named in an indictment Monday as being part of a conspiracy that generated at least $11 billion in phony tax losses for wealthy people. Nine other defendants were named Aug. 29. KPMG has already agreed to pay $456 million to avoid criminal prosecution. Greenberg is the only one who has been incarcerated.