Former regulator sentenced to jail for role in audit scam

A former regulator has been sentenced to nine months in jail for his role in a scheme to pass information about pending audit reviews to employees at KPMG LLP.

A former employee of the U.S. audit regulator, the Public Company Accounting Oversight Board (PCAOB), Jeffery Wada, was sentenced to nine months in prison and three years of supervised release for participating in a scheme to pass along confidential lists of the audits that the PCAOB planned to inspect to KPMG employees.

According to evidence presented in court, Wada, who was an inspections leader at the PCAOB, began passing confidential information to KPMG employees in 2015, enabling them to revise the audits that they knew would receive regulatory scrutiny.

Earlier his year, Wada was convicted of wire fraud charges for his role in the scheme.

“Jeffrey Wada violated not just the terms of his employment with the PCAOB but also the law when he provided confidential information about upcoming audit reviews to co-conspirators at KPMG,” said Geoffrey Berman, the U.S. attorney for the Southern District of New York.

“Wada hoped to secure a job at KPMG. What he got was a nine-month prison sentence,” Berman added.

David Britt, former co-head of the banking and capital markets group within KPMG’s audit group, pleaded guilty to one count of conspiracy to commit wire fraud earlier this month.

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