We have yet another late nominee for Tax Offender of the Year. From Paris, France comes the story of Jérôme Cahuzac, former Budget Minister under President François Hollande and soon to be resident of the
Bastille French Prison System.
The story begins in the 1990s. Then Dr. Cahuzac (a cosmetic surgeon) had a successful practice specializing in hair transplants. He was elected to Parliament in 1997. Around the same time, the Cahuzacs decided to move some money offshore. It’s apparent that French law here mimics US law: There’s nothing wrong with having foreign financial accounts; however, you better report them and the income you receive. That apparently didn’t happen. Meanwhile, Mr. Cahuzac was appointed to lead a finance commission for Parliament in 2010. In 2013 Mr. Cahuzac served as Budget Minister.
Unfortunately for Mr. Cahuzac, news of his foreign accounts came out. It was discovered later in 2013 he had a secret Swiss bank account for ten years (from 2000-2010). That led to his resignation in 2013. Mr. Cahuzac lied to the French Parliament, lied to the French government (not revealing another secret bank account—this one on the Isle of Man–that was used in moving €2.7 Million ($2.85 Million) to the Swiss bank account), and admitted his lies on his own blog. Oops! He was tried and convicted this past September for tax fraud.
Mr. Cahuzac received three years in prison; his wife received two years. Reyl Bank of Geneva, the bank that the Cahuzacs used, was fined €1.875 Million ($1.98 Million). Mrs. Cahuzac received a €100,000 ($106,000) fine; Mr. Cahuzac and two intermediaries he used must also pay a €100,000 fine.
Mr. Cahuzac’s attorney is arguing that the sentence is too long and that they will appeal asking for a lesser sentence. Apparently in the French justice system an appeal opens up both a lesser sentence (what Mr. Cahuzac’s attorney wants) and a longer sentence. In any case, it will like be several months before the appeal is heard.
This is yet another case of the fox guarding the henhouse. Mr. Cahuzac was also barred from seeking public office for five years. The French Socialist Party also kicked him out, and I suspect the chances of his successfully running for office is today zero.