Wednesday, March 26, 2008 | 1:55 p.m.
New Century Financial and its auditor KPMG are the subject of a tough Justice Department report, according to the New York Times.
"In a sweeping indictment of one of the nation’s largest accounting firms, an investigator released a report on Wednesday that said ‘improper and imprudent practices’ by a once high-flying mortgage company were condoned and enabled by its auditors. KPMG, one of the Big Four accounting firms, endorsed a move by New Century Financial, a failed mortgage company, to change its accounting practices in a way that allowed the company to report profits, rather than losses, at the height of the housing boom, an independent report commissioned by a division of the Justice Department concluded."
New Century Financial is the company where Joe Waltuch, head of Nevada's mortgage lending division, was a vice president and senior counsel for regulatory and legislative affairs until it imploded last year. He told me last year he had nothing to do with the alleged wrongdoing and is not a target of the investigation.
See our story about Waltuch here.
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