Former KPMG partner files suit


A former KPMG partner who was acquitted of charges of defrauding the government in one of the biggest tax fraud cases in U.S. history has filed a lawsuit against the accounting giant alleging that KPMG owes him $30 million in attorney fees, lost wages and future earnings.

David Greenberg, who was a partner with the firm’s Los Angeles office, was one of four people charged with using tax shelters to help wealthy people escape more than $1 billion in taxes. Two KPMG executives and a lawyer were convicted of the charges in December, but a jury exonerated Greenberg.

On Thursday, Bradley A. Patterson, an Irvine attorney acting on Greenberg’s behalf, filed the lawsuit in California Superior Court in Los Angeles seeking $30 million for what the suit says are Greenberg’s losses incurred as a result of the charges.


The lawsuit alleges that Greenberg, 50, was singled out as a rogue employee to cover up the company’s own widespread practice of tax evasion and conspiracy. The suit says KPMG publicly accused Greenberg of committing crimes and allegedly tried to divert attention from its illegal practices.

KPMG, whose clients include the Treasury Department, Bank of America Corp. and General Electric Co., disputed the allegations.

“The claims throughout this lawsuit are baseless,” KPMG spokesman Dan Ginsburg said. “We will use all appropriate measures to defend ourselves.”

The tax shelter scandal was initially exposed by a KPMG whistle-blower in 2003. In 2005, the Justice Department indicted 19 people associated with the firm on charges of conspiracy in a tax scheme. But charges against most members of the group were dismissed after a New York judge overseeing the case ruled that the government had unfairly blocked KPMG from paying legal fees for its employees.

Greenberg was one of four defendants who eventually went to trial in a Manhattan federal court.

In his lawsuit, Greenberg says he continues to pay his own legal fees, expenses that KPMG should cover. Greenberg remains the only defendant in the case whose legal expenses KPMG has not paid, the lawsuit says. At the same time, Greenberg says he continues to be named in civil lawsuits that have cost him $10 million in legal fees.


KPMG says it is not obligated to pay the legal expenses.

“This lawsuit attempts to revive issues that are long dead,” Ginsburg said. “Mr. Greenberg released KPMG from any obligation to pay his legal expenses in a 2003 agreement which has been upheld by the court.”

Greenberg’s lawsuit also seeks an additional $20 million for defamation and emotional distress from spending five months in jail.