Jury Awards $31.8 Million in Damages Against KPMG in Accounting Fraud Trial, Announces Eagan O’Malley & Avenatti, LLP

NEW BRUNSWICK, N.J.--(BUSINESS WIRE)--A jury today awarded $31.8 million against Big Four firm KPMG in an accounting fraud lawsuit. Cast Art Industries, LLP v. KPMG, LLP, Superior Court of New Jersey Law Division – Middlesex County (Docket No. MID L-3295-03). With interest, the verdict is over $41 million, an amount believed to be the largest ever awarded against KPMG. Cast Art sued KPMG in 2003 for professional malpractice and negligence for failing to detect a massive financial fraud at Papel Giftware, Inc. prior to Cast Art acquiring Papel in December 2000. The Honorable Phillip Paley presided over the trial, which began on Wednesday, September 10, 2008.

“We applaud the jury for their unanimous verdict and their finding that KPMG made false representations. In times like these, the public must be able to rely on auditors,” stated Michael Avenatti, counsel for Cast Art. For three years prior to its acquisition of Papel, KPMG repeatedly affirmed that Papel’s financial statements were accurate when in reality KPMG knew the company’s management had engaged in a number of fraudulent schemes designed to inflate the value of the company to potential buyers. Cast Art was represented at trial by Michael Avenatti and Alex Conti of the California law firm Eagan O’Malley & Avenatti, LLP and Alan Wasserman of the New Jersey law firm Wilentz, Goldman & Spitzer, P.A.

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