backOn December 5, 2023, the Second Circuit granted the government’s motion to remand the appeals of a former PCAOB inspection leader and a former KPMG executive to the district court so it could dismiss the case. The defendants were convicted in 2019 of wire fraud, based on the government’s contention that certain information obtained from the PCAOB constituted “property” under the wire fraud statutes. The defendants appealed their convictions to the Second Circuit. Separately, the Second Circuit in 2022 decided United States v. Blaszczak, which held that “obtaining advance information as to what the agency's preferred regulation would be, and when it would be announced" was not government property. Following the Blaszczak decision, the government conceded that the evidence at trial was insufficient to establish that the confidential information from the PCAOB constituted "property," which had been the gravamen of its case. On that basis, the government filed a motion to remand the appeals to the district court so that the cases could be dismissed. The Second Circuit granted the government’s motion.
The case is United States v. Middendorf et al., Case No. 19-2983, (2nd Cir. Dec. 5, 2023). The former PCAOB inspection leader is represented by Latham & Watkins, Weddle Law PLLC, and Brown Rudnick. The former KPMG partner is represented by Bruch Hanna LLP and Petrillio Klein & Boxer LLP. The government is represented by the U.S. Attorney’s Office for the Southern District of New York. A copy of the Order is available here.