This is a link to an article written by Charles Rettig, who is a criminal tax lawyer who has been following the Zwerner case and has written about this case in other articles on Forbes.com. I always like hearing what this brilliant lawyer has to say….
The big news here is that on April 8th, 2014, the U.S. government filed a Complaint seeking the forfeiture of approximately $12 million dollars in U.S. Currency from Zwerner’s account that was repatriated from Switzerland to New York. As Rettig points out this is the DOJ “displaying yet another powerful tool in the U.S. international enforcement arsenal”. This was a reference to the statements made by the DOJ in the Senate Sub-Committee Hearings on February 26th, 2014 lead by Senator Levin.
Mr. Rettig points out something interesting about the Excessive Fines Clause of the Eight Amendment of the U.S. Constitution in his article. Specifically, “to many, pursuing multiple year, maximum 50% penalties following submission of amended returns and delinquent FBARs appears punitive…. and that….”The Excessive Fines Clause and Relevant Supreme Court case law support a conclusion to the effect that a civil penalty is designed to punish. The touchstone of the constitutional inquiry under the Excessive Fines clause is the principle of proportionality – the amount of the penalty must bear some relationship to the gravity of the offense that it is designed to punish.” I think that it will be interesting to see what a court determines in this case on this issue. This has never really been tested in court and I think that the seizure could be construed as being excessive by a court given the facts of Zwerner. Time will tell, however, and this will be an interesting case for us to continue to follow.
Lastly, I agree with Mr. Rettig that those who continue to have undisclosed interests in foreign financial accounts and assets should immediately consult experienced and competent professionals. The facts and circumstances must be carefully reviewed before anyone can determine the appropriate method of coming into compliance with the various filing and reporting requirements with these offshore accounts.