Bernstein Litowitz Berger & Grossmann LLP Provides Update Re: Class Action against KPMG for Tax Shelter Conspiracy; KPMG's Admission of Unlawful Conduct Fuels Litigation; Sources Available for Comment.

NEW YORK -- Bernstein Litowitz Berger & Grossmann LLP ("BLBG"), the firm responsible for the historic $6.2 billion WorldCom class action recovery, is prosecuting the class action lawsuit against accounting giant KPMG, Presidio Advisors, Deutsche Bank, and the renowned law firm Sidley Austin Brown & Wood ("Sidley Austin"), and others for their involvement in a scheme to defraud taxpayers of millions of dollars in fees from abusive and fraudulent tax shelters known as "Offshore Portfolio Investment Strategy" (OPIS), and "Bond-linked Issue Premium Structure" (BLIPS).

Filed in January 2005 in the Circuit Court of Clark County, Arkansas on behalf of lead plaintiff, Thomas Becnel, and all other OPIS and BLIPS participants, the strength of the case was highlighted with KPMG's very public admission this past Thursday that it engaged in "unlawful conduct" that seriously harmed KPMG's clients.

KPMG and the other defendants collected tens of millions of dollars in fees from the OPIS and BLIPS schemes, even though, as the complaint alleges, defendants knew they were abusive tax shelters that lacked any economic substance and were highly unlikely to be approved by the IRS. Indeed, while defendants targeted and marketed OPIS and BLIPS to Becnel and each class member as legitimate transactions that would produce financial gain or lawful tax losses to minimize tax liability, the truth began to come to light only after the U.S. Senate investigated the schemes and revealed the illegal nature of these products.

Thomas Becnel, speaking on behalf of himself and fellow class members from his home in Destin, Florida, said: "We relied on defendants' representations that these products were legitimate and have been subjected to millions of dollars in damages because they were not."

"As a businessman, this is not the type of behavior I expect from my professional advisors, especially when they are as seemingly well-respected as KPMG, Presidio, Deutsche Bank, and Sidley Austin," Becnel added.

In addition to the Senate's investigation, KPMG has been under investigation by a Federal Grand Jury in New York for more than a year, because of its consultation on and involvement in abusive tax shelters from 1996 to 2002. Concern that prosecutors might be close to issuing an indictment sparked fears that the firm might implode and is largely considered to have been the catalyst for KPMG's public admission of guilt.

"While KPMG may or may not be indicted, we intend to press very hard to recover the class's damages on an expedited basis and to seek punitive damages given the egregiousness of defendants' actions," according to BLBG partner Jerry Silk. This class action is the device available to OPIS and BLIPs participants to recover damages without bringing their own lawsuit.

OPIS and BLIPS taxpayer members of the class, on their own or through their counsel, should contact Jerry Silk (212-554-1282, [e-mail]) to discuss their claims with class counsel and to receive answers to any questions they may have.

Mr. Silk and Mr. Becnel are available for both individual and joint media interviews. A PDF copy of the complaint #CV-2005-18 (Thomas R. Becnel, et al. v. KPMG, Presidio Advisors, Presidio Growth, Deutsche Bank, Deutsche Bank Securities, Bayerische Hypo Und Vereinsbank, Quellos Group, QA Investments, Quadra Capital Management, and Sidley Austin Brown & Wood) can be obtained by downloading it from Bernstein Litowitz's website at http://www.blbglaw.com/complaints/kpmg_complaint.pdf.

About Bernstein Litowitz

Bernstein Litowitz Berger & Grossmann LLP (www.blbglaw.com) prosecutes class and private actions nationwide on behalf of individual and institutional clients. Since 1983, the firm has recovered billions of dollars and achieved precedent-setting reforms in corporate governance on behalf of clients. The firm specializes in the litigation of securities class, derivative and direct actions in federal and state courts; corporate governance litigation, including claims for breach of fiduciary duty and proxy violations; prosecuting violations of federal and state anti-discrimination laws and vindication of employee rights; and consumer claims, on behalf of major institutional clients and lenders.