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Former French Official Convicted of Tax Fraud Former French Official Convicted of Tax Fraud
(35 minutes later)
PARIS — A former French official who led efforts to crack down on tax cheats was convicted on Thursday of tax fraud and money laundering.PARIS — A former French official who led efforts to crack down on tax cheats was convicted on Thursday of tax fraud and money laundering.
A three-judge panel at a Paris criminal court sentenced Jérôme Cahuzac, who had served as President François Hollande’s budget minister for less than a year, to three years in prison.A three-judge panel at a Paris criminal court sentenced Jérôme Cahuzac, who had served as President François Hollande’s budget minister for less than a year, to three years in prison.
Mr. Cahuzac stepped down in 2013 after revelations that he had a secret bank account in Switzerland, and it later emerged that he was connected to several accounts worth millions of dollars in tax havens. A few days after he had resigned, Mr. Cahuzac admitted that he had lied to Parliament about the accounts in Switzerland. Mr. Cahuzac stepped down in 2013 after revelations that he had a secret bank account in Switzerland, and it later emerged that he was connected to several accounts worth millions of dollars in tax havens. A few days after he resigned, Mr. Cahuzac admitted that he had lied to Parliament about the accounts in Switzerland.
The judges’ decision is another source of embarrassment for the troubled administration of Mr. Hollande, who has had exceptionally low approval ratings and recently announced that he would not seek re-election.The judges’ decision is another source of embarrassment for the troubled administration of Mr. Hollande, who has had exceptionally low approval ratings and recently announced that he would not seek re-election.
Mr. Cahuzac, 64, whom judges barred from holding a political office for five years, was convicted along with his now ex-wife, Patricia Cahuzac, who was sentenced to two years in prison. The couple had paid €2.3 million or $2.5 million, in back taxes. Mr. Cahuzac, 64, whom judges barred from holding a political office for five years, was convicted along with his former wife, Patricia Cahuzac, who was sentenced to two years in prison. The couple had paid €2.3 million or $2.5 million, in back taxes.
Jean Veil, Mr. Cahuzac’s lawyer, said that the ruling would be appealed, although the decision to carry on with the legal battle carried the risk of a sentence as long as seven years.Jean Veil, Mr. Cahuzac’s lawyer, said that the ruling would be appealed, although the decision to carry on with the legal battle carried the risk of a sentence as long as seven years.
“We think that prison isn’t really an appropriate punishment,” Mr. Veil told the French radio network Europe 1. “He’s already punished, he’s punished because he’s a pariah. He’s someone who can’t live in town anymore.” “We think that prison isn’t really an appropriate punishment,” Mr. Veil told the French radio network Europe 1. “He’s already punished. He’s punished because he’s a pariah. He’s someone who can’t live in town anymore.”
But Georges Fenech, a member of a parliamentary commission that investigated Mr. Cahuzac, told the French news network BFMTV that the sentence was appropriate. “This proves that no one is above the law,” he said. But Georges Fenech, a member of a parliamentary commission that investigated Mr. Cahuzac, told the French news network BFMTV that the sentence was appropriate. “This proves that no one is above the law,” Mr. Fenech said.
Mr. Cahuzac had previously acknowledged stashing money at banks in Singapore and Switzerland. During the trial, the prosecution was able to prove that about €2.7 million of the couple’s €$3.5 million fortune had moved through a bank account held by Ms. Cahuzac in the Isle of Man, a bank account that was never reported to the French authorities. Mr. Cahuzac previously acknowledged stashing money at banks in Singapore and Switzerland. During the trial, the prosecution was able to prove that about €2.7 million of the couple’s €$3.5 million fortune had moved through a bank account held by Ms. Cahuzac in the Isle of Man, a bank account that was never reported to the French authorities.
Judges at the court noted that Mr. Cahuzac had worked repeatedly to hide his assets, according to Agence France-Presse.Judges at the court noted that Mr. Cahuzac had worked repeatedly to hide his assets, according to Agence France-Presse.
Prosecutors said they suspected that the amount of wealth that was hidden was far higher, but that the couple had spent it to support their lavish lifestyle. Prosecutors said they suspected that the amount of wealth that was hidden was far higher but that the couple had spent it to support their lavish lifestyle.
“It’s a logical sentence, given the case,” Xavier Normand-Bodard, the prosecution’s lawyer, told reporters after the verdict was announced.“It’s a logical sentence, given the case,” Xavier Normand-Bodard, the prosecution’s lawyer, told reporters after the verdict was announced.
The ruling came after a highly publicized two-week trial in September, at which Mr. Cahuzac — a former cosmetic surgeon who was known for his aggressive, confrontational style as a politician — was described by his lawyer as being in “exile by force” and as “not wanted in the public community anymore.”The ruling came after a highly publicized two-week trial in September, at which Mr. Cahuzac — a former cosmetic surgeon who was known for his aggressive, confrontational style as a politician — was described by his lawyer as being in “exile by force” and as “not wanted in the public community anymore.”
François Reyl, the head of the Geneva bank that bears his surname, and Philippe Houman, a Frenchman who acted as an intermediary, were convicted on Thursday of assisting Mr. Cahuzac in transferring funds from an account in Switzerland to one in Singapore. The two were each given a suspended sentence of a year in prison and a €375,000 fine, and the Swiss bank was fined €1,875,000 for money laundering.François Reyl, the head of the Geneva bank that bears his surname, and Philippe Houman, a Frenchman who acted as an intermediary, were convicted on Thursday of assisting Mr. Cahuzac in transferring funds from an account in Switzerland to one in Singapore. The two were each given a suspended sentence of a year in prison and a €375,000 fine, and the Swiss bank was fined €1,875,000 for money laundering.
In addition, the judges fined Ms. Cahuzac €100,000. Mr. Cahuzac, Mr. Reyl and Mr. Houman were instructed to pay the same amount among themselves.In addition, the judges fined Ms. Cahuzac €100,000. Mr. Cahuzac, Mr. Reyl and Mr. Houman were instructed to pay the same amount among themselves.
Mr. Cahuzac began sheltering some of the money the couple made from their successful hair transplant business in a UBS account in Switzerland in the 1990s, and those funds were later moved to Singapore.Mr. Cahuzac began sheltering some of the money the couple made from their successful hair transplant business in a UBS account in Switzerland in the 1990s, and those funds were later moved to Singapore.
Mr. Cahuzac was first elected to Parliament in 1997. He retained the family’s offshore accounts even after being appointed to lead a parliamentary finance commission in 2010.Mr. Cahuzac was first elected to Parliament in 1997. He retained the family’s offshore accounts even after being appointed to lead a parliamentary finance commission in 2010.
Once a rising star of the Socialist Party, Mr. Cahuzac, whose sharp-tongued rhetoric and stern rigor were dreaded by his political opponents and lauded by his allies, suffered a humbling fall from grace that included an admission that he had repeatedly lied before Parliament and on television about holding such accounts. Once a rising star of the Socialist Party, Mr. Cahuzac, whose sharp-tongued speech and stern rigor were dreaded by his political opponents and lauded by his allies, suffered a humbling fall from grace that included an admission that he had repeatedly lied before Parliament and on television about holding such accounts.
The confession, which stunned France, came after an investigation by Mediapart, an independent news website, asserted that Mr. Cahuzac had held an offshore account for roughly two decades.The confession, which stunned France, came after an investigation by Mediapart, an independent news website, asserted that Mr. Cahuzac had held an offshore account for roughly two decades.
The most devastating blow came when Mediapart obtained an audio recording in which Mr. Cahuzac mentioned the account. “I was caught in a spiral of lies,” Mr. Cahuzac wrote on his blog at the time.The most devastating blow came when Mediapart obtained an audio recording in which Mr. Cahuzac mentioned the account. “I was caught in a spiral of lies,” Mr. Cahuzac wrote on his blog at the time.
The case became known as “the Cahuzac Affair,” and it cast a pall over a promise from the recently elected Mr. Hollande that France would be “exemplary” during his term, making a pointed contrast with the financial scandals that haunted the administration of his predecessor, Nicolas Sarkozy.The case became known as “the Cahuzac Affair,” and it cast a pall over a promise from the recently elected Mr. Hollande that France would be “exemplary” during his term, making a pointed contrast with the financial scandals that haunted the administration of his predecessor, Nicolas Sarkozy.
Mr. Hollande was put on the defensive amid speculation that he had been aware of Mr. Cahuzac’s financial situation before it became publicly known, and the president scrambled to try to restore the public’s confidence.Mr. Hollande was put on the defensive amid speculation that he had been aware of Mr. Cahuzac’s financial situation before it became publicly known, and the president scrambled to try to restore the public’s confidence.
As a result, laws were approved in 2013 to address conflicts of interest for those in public office. Top officials were obligated to make their property assets known publicly, and the law called for the creation of an independent anti-corruption office and a national financial prosecutor’s office, which handled Mr. Cahuzac’s case.As a result, laws were approved in 2013 to address conflicts of interest for those in public office. Top officials were obligated to make their property assets known publicly, and the law called for the creation of an independent anti-corruption office and a national financial prosecutor’s office, which handled Mr. Cahuzac’s case.
In another case, Thomas Thevenoud, a junior minister under Mr. Hollande, is scheduled to go on trial next year. Mr. Thevenoud stepped down after it appeared that he and his wife had failed to declare income in previous years because of what he said was “fiscal phobia.”In another case, Thomas Thevenoud, a junior minister under Mr. Hollande, is scheduled to go on trial next year. Mr. Thevenoud stepped down after it appeared that he and his wife had failed to declare income in previous years because of what he said was “fiscal phobia.”
A more highly anticipated trial is to begin this month, when Christine Lagarde, the managing director of the International Monetary Fund and a finance minister under Mr. Sarkozy, goes on trial. She is charged with committing “negligence by a governmental official” while overseeing a politically charged 2007 arbitration case. A conviction could result in a sentence of one year in prison and a fine of €15,000.A more highly anticipated trial is to begin this month, when Christine Lagarde, the managing director of the International Monetary Fund and a finance minister under Mr. Sarkozy, goes on trial. She is charged with committing “negligence by a governmental official” while overseeing a politically charged 2007 arbitration case. A conviction could result in a sentence of one year in prison and a fine of €15,000.