The Tax Times: From Offshore Assets to Onshore Justice: Bench Warrant Issued in High-Profile Tax Case

Saturday, October 4, 2025

From Offshore Assets to Onshore Justice: Bench Warrant Issued in High-Profile Tax Case

According to Law360, A Florida magistrate judge recommended an order for the arrest of a dual U.S.-German citizen who has failed to pay about $19.6 million in penalties for undisclosed Swiss bank accounts, holding that imposing additional fines would be "an empty gesture."

U.S. Magistrate Judge Bruce E. Reinhart recommended on September 4, 2025 that the district court issue a bench warrant against Isac Schwarzbaum, who failed to appear in court for an Aug. 28 hearing to determine civil contempt sanctions. The court in December 2023 found Schwarzbaum in contempt for failing to repatriate his assets to pay penalties for unreported offshore accounts.

In recommending a bench warrant for the arrest of Schwarzbaum if he attempts to enter the U.S., Judge Reinhart noted that the U.S. government has conceded that additional fines would be "futile" in securing compliance.

"Mr. Schwarzbaum has failed to repatriate his assets and failed to satisfy an already large money judgment," Judge Reinhart said. "So, imposing escalating fines would be an empty gesture."

In a separate filing, Judge Reinhart said Schwarzbaum's failure to appear in court could also be the basis for criminal contempt. Accordingly, he recommended that the district court refer the case to Florida prosecutors.

U.S. District Judge Beth Bloom in March 2020 concluded that Schwarzbaum showed reckless conduct that amounted to a willful failure to file foreign bank and financial account forms for 2007 through 2009. She issued a final judgment in November 2022 that calculated penalties, interest and late fees, which stood at about $12.5 million in total at the time.

In pushing for a repatriation order, the government said in January 2023 that Schwarzbaum sold his Florida home less than three months after Judge Bloom issued her March 2020 findings.

After "Fleeing The Country," Schwarzbaum Has Kept

No Assets In The U.S. Yet Reported To The Government

In 2021 That He Had More Than $37 Million In

Three Swiss Banks, According To The U.S.

Judge Bloom ordered repatriation in March 2023 and said in June that year that the former Florida resident could not wait until the Eleventh Circuit weighed in on his case.

In August 2024, a three-judge panel on the appeals court trimmed $300,000 from the penalty amount. The reduction reflected penalties associated with one particular offshore account, which held a relatively low amount that made the $300,000 penalty "grossly disproportionate," according the panel.

Back before the Florida district court, Judge Bloom issued a final judgment in April of $19.6 million, which included interest and late fees.

Schwarzbaum is representing himself after his counsel withdrew in early August.