The Justice Department has just unsealed the indictment by a federal grand jury in Manhattan of nine KPMG accountants in a tax fraud scheme that is alleged to have generated 11 billion dollars of in phony losses, enabling some of the accounting firm’s clients to evade billions of dollars in taxes while the firm generated $115 million in fees. KPMG itself will not be prosecuted if it meets several conditions, including payment of fines, restitution, and penalties that add up to $456 million, full cooperation with the government’s continuing investigation and prosecution, and the establishment of a compliance and ethics program.

The indictments, and the decision to go after the real culprits without putting one of the remaining big accounting firms out of business, are a credit to my friend Dave Kelley, who is in his last week as U.S. Attorney for the Southern District of New York.

The indictment can be found here, and Attorney General Gonzales’s remarks announcing the charges are here.