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About POGO's Federal Contractor Misconduct Database (FCMD)
The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »
Ranking: 81
Deloitte LLP
Deloitte LLP is an international accounting and consulting firm. Deloitte has approximately 170,000 staff in more than 150 countries providing audit, tax, consulting, enterprise risk, and financial advisory services through its member firms.
Federal Contract $: $ 865.4m
Total Number of Instances: 12
Total Misconduct dollar amount: $ 487.6m
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Instances of Misconduct
1. Improper Professional Conduct (Delphi)
The U.S. Securities and Exchange Commission (SEC) settled administrative proceedings finding that Nicholas Difazio and Duane Higgins, Deloitte & Touche engagement partners on the 2000 and 2001 audits of the financial statements of Delphi Corporation, engaged in improper professional conduct on those audits. The SEC found that Difazio, the lead engagement partner, and Higgins, the audit engagement partner, failed to exercise due professional care in the planning and performance of the audit. Difazio and Higgins settled without admitting or denying the SEC’s findings. Both men were temporarily denied the privilege of appearing or practicing before the SEC as an accountant. See related Deloitte LLP instance, “Delphi Corporation Securities Litigation”.... more»
2. Adelphia Recovery Trust v. Deloitte & Touche
The Adelphia Recovery Trust reached a $167.5 million settlement of its claims against Adelphia’s former auditor, Deloitte & Touche LLP. The trust was formed after Adelphia Communications Corporation collapsed in 2002 as the result of an accounting fraud that led to the criminal convictions of its founder, John J. Rigas, and his son Timothy. Deloitte served as Adelphi’s audit firm from the mid-1980s to May 2002, when Deloitte suspended its work based on the belief that Adelphia’s books and records had been falsified. Deloitte denied any wrongdoing. See related Deloitte instance, “SEC v. Deloitte & Touche (Adelphia Communications Audit)”... more»
3. SEC v. Deloitte & Touche (Adelphia Communications Audit)
Deloitte & Touche agreed to pay $50 million to settle U.S. Securities and Exchange Commission (SEC) charges stemming from Deloitte’s audit of Adelphia Communications Corporation’s fiscal year 2000 financial statements. The SEC found that Deloitte engaged in improper professional conduct and caused Adelphia’s violations of the securities law recordkeeping provisions because it failed to detect a massive fraud perpetrated by Adelphia. Deloitte agreed to the settlement without admitting or denying the SEC’s allegations. See related Deloitte instance, “Adelphia Recovery Trust v. Deloitte & Touche.”... more»
4. Just For Feet, Inc. Audit
The U.S. Securities and Exchange Commission (SEC) issued an order instituting public administrative proceedings against Deloitte & Touche LLP based on its failed audit in 1999 of the fiscal 1998 financial statements of Just for Feet, Inc., a now-defunct shoe and sports apparel retailer, for which the firm received audit fees of approximately $361,000. The engagement partner, Steven H. Barry, and the audit manager, Karen T. Baker, were also charged. The SEC found that Just for Feet falsified its financial statements, and that Deloitte, Barry and Baker reasonably should have known that Just for Feet's 1998 financial statements had not been prepared in accordance with generally accepted accounting principles. The SEC also found that Deloitte, Barry and Baker did not comply with generally accepted auditing standards in the conduct of their audit and engaged in improper professional conduct. Without admitting or denying the SEC’s findings, Deloitte agreed to accept a censure and pay $375,000 to settle the charges, while Barry and Baker each consented to a temporary denial of the privilege of appearing or practicing before the SEC as an accountant.... more»
5. Micrel v. Deloitte & Touche (Malpractice)
Semiconductor manufacturer Micrel Inc. filed a malpractice lawsuit against its former accountant, Deloitte & Touche, alleging it approved a stock option pricing program that amounted to backdating. The lawsuit settled in 2007 with Deloitte agreeing to pay Micrel $15.5 million.... more»
6. Parmalat v. Deloitte & Touche
Italian dairy company Parmalat SpA and Deloitte & Touche SpA and Dianthus SpA (which operated in Italy under the Deloitte & Touche name until July 2003) settled a lawsuit filed by Parmalat and counterclaims filed by Deloitte and Dianthus over an accounting scandal that led Parmalat to file for bankruptcy in December 2003. Parmalat blamed Deloitte, which was its principal auditor at the time.... more»
7. Reliance Insurance Company Audit
The Pennsylvania Insurance Department filed a lawsuit against Deloitte, the auditor of Reliance Insurance Company, which was liquidated in 2001 after a shortfall of over $1 billion in assets was discovered. The civil suit accused Deloitte Touche LLC and Deloitte principal actuary Jan A. Lommele of professional negligence and malpractice, misrepresentation, breach of contract, and aiding and abetting breaches of fiduciary duties by Reliance chairman Saul P. Steinberg and other former officials. In November 2008, Deloitte settled the lawsuit for $40 million.... more»
8. General Motors Securities Litigation
A securities class-action lawsuit alleged that General Motors, aided by its outside auditor, Deloitte, filed misleading financial statements between 2002 and 2006 that covered up earnings shortfalls through accounting manipulations. Under the terms of a settlement, Deloitte agreed to pay $26 million, while GM agreed to pay $277 million.... more»
9. Beazer Homes Securities Litigation
Deloitte & Touche agreed to pay investors of Beazer Homes USA $950,000 to settle claims that Deloitte, Beazer’s outside auditor, should have noticed the homebuilder was issuing inaccurate financial statements during the housing market decline in 2005-2006. Deloitte, Beazer, and former Beazer executives settled the securities fraud class-action lawsuit for a total of $30.5 million.... more»
10. Delphi Corporation Securities Litigation
Investors in auto parts manufacturer Delphi Corporation filed a class-action securities fraud lawsuit against Deloitte & Touche for its role as outside auditor of Delphi, which in 2005 had to restate of all of its financial statements for the previous five years. In December 2007, Deloitte agreed to pay $38.25 million to settle the lawsuit. See related Deloitte LLP instance, “Improper Professional Conduct (Delphi)”.... more»
11. Review of USAID Bank Supervision Assistance in Afghanistan
Beginning in 2003, BearingPoint (and later Deloitte, which acquired BearingPoint) provided technical assistance at the Afghanistan Central Bank, which supervised Kabul Bank, Afghanistan’s largest private bank. An investigation by USAID’s Inspector General found that BearingPoint and Deloitte advisers failed to aggressively investigate or report serious problems, including fraudulent activities, at Kabul Bank over a span of 2 years before the bank collapsed in September 2010. USAID subsequently terminated the bank supervision component of its contract with Deloitte, but did not hold Deloitte responsible for the fraud or the bank’s failure.... more»
12. 2007 PCAOB Audit
A 2007 inspection of Deloitte & Touche LLP by the Public Company Accounting Oversight Board (PCAOB), a private, non-profit corporation created by Congress in 2002 to oversee registered public accounting firms, found deficiencies in the firm’s auditing practices. A review of selected Deloitte audits found failures to identify or appropriately address errors in the issuer's application of GAAP (Generally Accepted Accounting Principles) and failures to perform certain necessary audit procedures. The inspection also found deficiencies with regard to Deloitte’s system of foreign affiliates, namely, the firm’s ability to assess a foreign office’s qualifications and familiarity with U.S. GAAP, PCAOB standards, and SEC reporting requirements.... more»
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