FOR IMMEDIATE RELEASE
MONDAY, AUGUST 29, 2005
TDD (202) 514-1888
CORPORATE FRAUD TASK FORCE
Since its creation by Executive Order in July 2002, the Corporate Fraud Task Force (CFTF) has spearheaded the Administration’s effort to prosecute corporate malfeasance, protect the jobs of hard-working Americans, and restore confidence to the marketplace. Through the coordinated efforts of several federal agencies, the CFTF is sending a clear message that criminal activities in the corporate world will be swiftly and decisively prosecuted. By acting to deter fraud, the Task Force is also helping to restore shareholder and employee trust, and demonstrating to the American people that the vast majority of corporate leaders are still honest and hardworking. With today’s deferred prosecution agreement with KPMG LLP, and the indictment of nine former employees and individuals associated with KPMG-as well as one former partner of a prominent law firm-the Justice Department furthers its commitment to the American worker, investor, and honest taxpayers.
·Since its inception, the Task Force has contributed to the following:
-Securing over 700 corporate fraud convictions;
-Convicting over 100 corporate CEOs and presidents with some type of corporate fraud crime in connection with close to 600 filed cases;
-Convicting more than 80 vice-presidents;
-Convicting more than 30 CFOs; and
-Charging more than 1,300 defendants, including the indictment announced today.
·From June 1, 2002 through June 30, 2005, more than $266 million has been collected in restitution, fines, and forfeitures from corporate fraud convictions.
·Significant cases prosecuted criminally include, among others: Worldcom Chief Executive Officer Bernard Ebbers, convicted on fraud charges in the Southern District of New York; a deferred prosecution agreement with America Online in the Eastern District of Virginia; Adelphia Chief Executive Officer John Rigas, convicted on charges of securities fraud, bank fraud, and conspiracy in the Southern District of New York; a deferred prosecution agreement with Computer Associates, prosecuted in the Eastern District of New York.
·The Justice Department’s Enron Task Force has obtained charges against 33 Enron defendants, including 21 former Enron executives, obtained the convictions of 11 Enron defendants, including its former CFO and treasurer, and seized over $162 million for the benefit of victims of the frauds at Enron.
·Federal prosecutors working with the CFTF have entered into a variety of agreements with corporations regarding allegations of fraudulent criminal activity, including guilty plea agreements, deferred prosecution agreements, and non-prosecution agreements. These agreements, such as the deferred prosecution agreement with KPMG today, ensure the company admits its conduct, agrees to real reforms-including full cooperation in ongoing investigations-and the establishment of internal controls to prevent criminal conduct from re-occurring. In cases where the company fails to agree to these conditions, or fails to abide by the terms of such an agreement, the Department of Justice will not hesitate to prosecute the company.
·The work of the CFTF is ongoing. The Task Force will continue to successfully:
- Restore confidence to the marketplace;
- Provide fair and accurate information to the investing public;
- Reward shareholder and employee trust; and
- Protect jobs and savings of hard-working Americans.