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White Collar Crime: The Second Circuit’s Decision in U.S. v. Stein: The End of the Holder-Thompson-McNulty Era
By Kathryn Keneally
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White Collar Crime columns.
The prosecutor defined cooperation as requiring witnesses to “‘tell the
truth’ the … way we … define it.”1 Those words, which are quoted more
than halfway through the Second Circuit’s recent decision in United
States v. Stein, are at the heart of what has been wrong with the
government’s policies under the Holder, Thompson, and McNulty memoranda,
and are at the core of what cost the government its indictments of 13
former partners and employees of the accounting firm KPMG.
The indictment in Stein was heralded by the government as the largest
criminal tax prosecution in history. At issue were transactions that
were structured to avoid tax liability, or as the government prefers,
alleged abusive tax shelters. The charges focused on four transactions,
which were known by the acronyms BLIPS, FLIP, OPIS, and SOS. The
government in effect contends that the sole reason for taxpayers to
engage in these transactions was to avoid tax liability. Thus the
charges in th
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