October 16, 2018 / 7:51 PM / a month ago

Former KPMG executive director pleads guilty to audit fraud scheme

NEW YORK (Reuters) - A former executive director at KPMG on Tuesday pleaded guilty to taking part in a scheme to help the accounting firm pass regulatory inspections using confidential information leaked from an accounting watchdog.

Cynthia Holder, 52, pleaded guilty before U.S. District Judge Paul Oetken in Manhattan federal court to conspiracy to defraud the United States and to wire fraud.

Holder, who worked as a staffer at the Public Company Accounting Oversight Board (PCAOB), an industry watchdog, before moving to KPMG in 2015, was one of five people charged by federal prosecutors in January in connection with the alleged scheme.

She said that while working at KPMG, she obtained confidential information from a contact at PCAOB and passed it on to her boss, Brian Sweet, who has already pleaded guilty to related charges.

“I came to regret my actions and I accept full responsibility,” she said.

Holder did not sign a plea agreement. Prosecutors said in a letter that they believe sentencing guidelines call for a prison sentence of 41 to 51 months. Oetken scheduled sentencing for April 5, 2019.

The others charged in the case are former KPMG executives David Middendorf, David Britt and Thomas Whittle, and Jeffrey Wada, the former PCAOB employee accused of passing confidential information to Holder. They are expected to go to trial in February.

Reporting by Brendan Pierson in New York; Editing by Dan Grebler

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