Former KPMG inspections leader Thomas Whittle was sentenced to two years of supervised release Wednesday for his role in the Big Four firm’s cheating scandal that saw three of his colleagues and co-conspirators receive time behind bars.
Whittle is the last of the central figures in the scandal to face judgment after pleading guilty in 2018 to wire fraud and corruption charges. His sentencing, handed down by Judge J. Paul Oetken for the U.S. District Court for the Southern District of New York, marks the apparent end to a saga that has plagued KPMG since charges related to the scandal were first announced in 2018.
The scandal involved KPMG employees being provided confidential information on certain of the 2016 inspection selections by the Public Company Accounting Oversight Board (PCAOB) in an effort to cheat the system. The firm agreed to pay $50 million in June 2019 to settle charges from the Securities and Exchange Commission related to the misconduct, which also included allegations of cheating on internal exams that were covered in the settlement.
In September 2019, David Middendorf, former national managing partner for audit quality and professional practice at KPMG and the individual found to be “at the top of a chain of corruption,” was sentenced to one year and one day in federal prison and three years of supervised release for his role in the scandal. Jeffrey Wada, a former PCAOB inspections leader, was sentenced to nine months in prison and three years of supervised release in October 2019 for providing KPMG employees with confidential information on certain of the PCAOB’s 2016 inspection selections. Cynthia Holder, another ex-KPMG and PCAOB employee whom Wada provided the confidential information to, was sentenced to eight months in federal prison and two years of supervised release in August 2019.
In addition to Whittle, former KPMG partners David Britt and Brian Sweet were each able to avoid prison time in their respective sentences. Britt received six months of home confinement and was ordered to be deported to his native Australia, while Sweet just last month got time served and three years of probation.
Like Sweet, Whittle was given a break for his cooperation with the government in its case, serving as a key informant in the convictions of Middendorf and Wada. Ahead of his sentencing, Whittle’s family and legal representation had pleaded for leniency, citing his overall character and the lessons he learned from his role in the scandal.
“He deeply regrets the conduct that brings him before the Court for sentencing, which was a complete anomaly in the context of the rest of his life,” Whittle’s lawyers wrote in a Nov. 25 court filing. “Tom has worked diligently to atone for his wrongdoing by cooperating extensively with the government in this case. … Tom has learned from his mistake, and he will never commit another crime.”