Acquitted in Norway Bankruptcy Case
Los Angeles Times
Thursday, January 4, 2007
OSLO, Norway -- A partner with accounting firm KPMG was
sentenced to 30 days in jail Thursday for negligent
accounting in one of this country's worst bankruptcies,
while the Norwegian branch of the firm was acquitted.
Accountant John Haukland, 57, was auditor for the books of
the Finance Credit collection agency in the years ahead of
it going bankrupt in 2003, with about 1.5 billion kroner
($242 million) in debt to eight banks. He has two weeks to
decide whether to appeal.
In its 36-page ruling, the Oslo District Court said Haukland
and his team approved inaccurate annual accounts from
Finance Credit, and as early as 2000 should have seen that
figures were exaggerated in its books.
"Haukland is convicted of contributing through gross
negligence to significant violations of the accounting
laws," the ruling said. "Some of the negligent acts or
omissions were intentionally committed."
In passing the sentence, the court noted as a mitigating
circumstance that Haukland had surrendered his accounting
license and admitted to many of the allegations in court.
The court found that KPMG itself could not be held
responsible for the negligence of Haukland and his team, and
rejected the prosecution's demand that KPMG be fined 13
million kroner ($2.1 million).
"All things considered, the court finds that it was not the
organization KPMG that failed in this case, but auditor
Haukland and his team," the ruling said.
In July 2005, KPMG lost a civil suit by the eight banks, and
was ordered to pay 656 million kroner ($106 million) in
compensation. The Norwegian branch of KPMG appealed, and in
September 2005 the sides reached an out of court settlement
in which KPMG agreed to pay the banks 347.3 million kroner
Finance Credit was a collection agency, which means it
bought unpaid debts from other companies, then sought to
collect the funds plus fees.
The agency's founders and key owners, Torgeir Stensrud and
Trond Kristoffersen, were previously convicted of 11 counts
of gross fraud, including four counts of falsifying
documents. Stensrud was sentenced to nine years in prison,
Kristoffersen to seven years. They were also ordered to pay
1 billion kroner ($161 million) in compensation to the
The court said a mitigating circumstance in sentencing
Haukland was that "Stensrud and Kristoffersen both verbally
and in other ways had skills that few other criminals
KPMG International is a cooperative that serves as a
coordinating entity for a network of independent member
firms. The Norwegian branch employs about 550 people.
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