Wednesday, October 26, 2011

9th Circuit Finds Fifth Amendment Privilege Does Not Apply to Swiss Banking Records

Ninth Circuit Finds Fifth Amendment Privilege Does Not Apply to Swiss Banking Records - The Fifth Amendment privilege does not apply to records that fall under the Required Records Doctrine.

On August 19, 2011, the U.S. Court of Appeals for the Ninth Circuit upheld a lower court’s ruling compelling an individual, M.H., to comply with a grand jury subpoena duces tecum demanding that he produce records relating to foreign bank accounts. The decision turned on the issue of whether the subpoena violated the individual’s Fifth Amendment protection against self-incrimination or whether the Fifth Amendment did not apply under the Required Records Doctrine.
M.H. was the target of a grand jury investigation into whether he used Swiss bank accounts to evade federal taxes. In 2009, as part of a deferred-prosecution agreement, UBS had provided M.H.’s name, along with approximately 250 others, to the United States Department of Justice, identifying him as someone who might have evaded taxes.

The government’s subpoena sought information that M.H. was required to keep and maintain for inspection under the Bank Secrecy Act of 1970 ("BSA"), and report to the government annually through the Form TD F 90-22.1, "Report of Foreign Bank and Financial Accounts" or "FBAR," including records reflecting the name of the account holder, the account number, the name and address of each foreign bank maintaining the account, the type of account, and the maximum annual value for each account.
Finding thre elements of the Required Records Doctrine present, the Ninth Circuit affirmed the trial court’s order compelling M.H. to produce the subpoenaed information. The court’s decision suggests that anyone claiming Fifth Amendment protection for foreign bank records will have a tough battle, particularly in the Ninth Circuit.

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