A former KPMG LLP partner was sentenced to a year and a day infederal prison for his role in eliciting confidential informationfrom the U.S. audit regulator to boost the firm's annual inspectionresults.

David Middendorf, KPMG's onetime national managing partner foraudit quality and professional practice, and Jeffrey Wada, a formerinspections leader at the Public Company Accounting Oversight Board(PCAOB), were convicted in March of multiple counts of fraud.Prosecutors said several former employees of the board, includingWada, helped funnel details about its inspection plans to leadersof KPMG, who used the information to change the audits.

Middendorf "was at the top of a chain of corruption thatthreatened to corrupt KPMG and the PCAOB's inspections process,"Geoffrey Berman, the U.S. attorney in Manhattan, said in astatement Wednesday. "Today's sentence recognizes the harm thisfraudulent scheme caused to the PCAOB and the auditing professionmore generally."

Prosecutors had urged U.S. District Judge J. Paul Oetken to sendMiddendorf, 55, to prison, arguing that in his position he couldhave stopped the scheme in its tracks. Lawyers for Middendorf askedthe judge for probation, noting that their client wasn't accused ofstealing money and that he testified on his own behalf. On thestand, Middendorf admitting authorizing the revisited audits butsaid he wanted the firm to double-check its work.

Middendorf, of Marietta, Georgia, told the judge he had workedfor KPMG for more than 30 years, took his responsibility as aprotector of capital markets seriously, and had simply made amistake. "The consequences to me from this case are devastating,"Middendorf said.

While the sentence was well below the 57 months Middendorf facedunder federal guidelines, Oetken said "meaningful punishment" wasnecessary to help prevent others from engaging in similar conduct.Middendorf was regarded as an "honest and respected professional"but knew what he was doing was wrong, the judge said.

"It is more subtle than stealing money," Oetken said. "Itinvolved corruption of a regulatory process."

The judge gave Middendorf a year and a day because a sentence ofmore than 12 months allows a prisoner to get credit for goodbehavior.

KPMG, one of the Big Four accounting firms, agreed to pay $50million in June to settle Securities and Exchange Commission (SEC)allegations that it altered past audit work after receiving theinformation.

The PCAOB, which is the main U.S. regulator of auditors and isoverseen by the SEC, was created in the wake of the Enron andWorldCom scandals to build confidence in how public companiesreport their financial results.

Three other people charged in connection with the case havepleaded guilty, including Cynthia Holder, a former PCAOB employeewho was sentenced last month to eight months in prison.

The case is U.S. v Middendorf, 18-cr-36, U.S. District Court,Southern District of New York (Manhattan).

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