Eight former KPMG executives were indicted on Monday and the firm agreed to pay $456 million as it admitted setting up fraudulent shelters to help rich clients dodge billions of dollars in taxes.
The firm also agreed to submit to an independent monitor. KPMG itself avoided a potentially devastating criminal indictment, an outcome that suited prosecutors who worry about the "collateral consequences" of corporate prosecutions as much as the firm's directors feared KPMG's breakup.
"The conviction of an organisation can affect ordinary workers," Attorney General Alberto Gonzales said at a justice department news conference. "Justice must serve offenders and victims as well as the economy and the general public."
While Gonzales and other officials refrained from linking the KPMG settlement to prior cases, the Andersen case is a ready reminder of the potential outcome of a prosecutorial full-court press.
Arthur Andersen was decimated after prosecutors charged it with obstruction of justice, reducing accounting's Big Five firms to a Big Four.
Some 28,000 workers had to find other jobs after it was convicted of destroying documents related to the energy giant Enron. That forced the firm to surrender its accounting license and stop conducting public audits.
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