US v Briguet is a brief order out of the Eastern District of New York. Briguet is an FBAR case. The maximum penalty for a willful FBAR violation is the greater of $100,000 or 50% of the balance in the account at the time of the violation. Proving that a violation is willful is the key aspect of most of these cases. The order relates to a motion in limine that Briguet filed. That motion asked the court to preclude the admission at trial of 96 newspaper articles that concerned the government’s crackdown on US taxpayers who held offshore accounts and did not report their existence on US tax returns or the FinCEN Form 114. The defendant argued that the articles should be excluded on hearsay, relevancy and unfair prejudice grounds. The order rejects the motion and (mostly) allows the articles into evidence.
read more...As to hearsay, the order held that the articles were not offered to prove the truth of the matter being asserted (i.e., that Mr Briguet willfully failed to file the FBAR form). Instead, the court held that the government was offering the articles as circumstantial evidence of the state of Briguet’s mind and general awareness of the FBAR filing requirement.
As to relevance, the court noted the fairly wide definition of relevance for admissibility purposes, i.e., an item is “relevant when ‘it has any tendency to make a fact more or less probable than it would be without the evidence.’” United States v. White, 692 F.3d 235, 246 (2d Cir. 2012), as amended (Sept. 28, 2012) (quoting Fed. R. Evid. 401. With that benchmark, the court held that the articles, which were in the NY Times and Wall Street Journal prior to the date of the filing deadline, easily met the standard. Drilling deeper, the court noted that a number of the headlines flagged efforts targeted at UBS clients (where Briguet had his account) and that Briguet had testified that he read the financial sections of the NY Times and the Journal “every day.” In addition the order flagged the customer logs from UBS itself, “one of which illustrates that he “closely followed the published events on the UBS business policy for US customers” and “consulted a lawyer, aware of [UBS’s] change of policy, and fearing for the confidentiality of his account.”
In concluding that the pre-filing articles were relevant the order concluded that “a reasonable jury might readily conclude Defendant read the newspaper articles in the financial sections of the New York Times and Wall Street Journal, and such an inference seriously undermines any claim that he was unaware of the FBAR filing requirement.”
It was not a complete government victory, however. The motion also opposed admission of articles that appeared after the FBAR filing date. While the court declined to exclude the articles it reserved judgment and stated it would resolve that issue later. While the articles are not relevant to the state of mind at the time of the FBAR deadline the court noted that they may prove relevant as to when Briguet became aware of the deadline.
As a final objection to admissibility Briguet’s motion claimed that the articles would unfairly prejudice him because “the jury may be left with the impression that the UBS case, DOJ’s Swiss bank crackdown, and the IRS’s offshore voluntary disclosure program were ‘hot issues’ to investors who read the New York Times and Wall Street Journal and … infer … that Mr. Briguet probably read some of the articles at issue.” While noting that the observation was “valid” the court sided with the government noting that “[e]vidence is prejudicial, but in this instance any prejudicial effect is entirely coextensive with the probative value of the articles and therefore not unduly prejudicial.”
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