Posted On Monday, November 30, 2015
By:
On November 19, the Department of Justice announced a non-prosecution agreement requiring BNP Paribas, a Switzerland-based financial institution, to pay $59.8 million to avoid prosecution for allegations that it helped American taxpayers avoid paying U.S. taxes. In the agreement, BNP Paribas admitted that it opened and maintained accounts for U.S. taxpayers under the names of non-U.S. corporations, foundations, trusts, or other legal entities, thus allowing American taxpayers to conceal their ownership of the accounts. There were a total of 760 U.S. accounts worth approximately $1.2 billion. Of that amount, $650 million was held by “sham entities” in offshore locations such as the British Virgin Islands, Panama, Lichtenstein, and Liberia.
The non-prosecution agreement was reached through DOJ’s Swiss Bank Program announced in August 2013, which allows Swiss banks to resolve potential criminal charges if they disclose the commission of tax-related criminal offenses in connection with undeclared bank accounts. However, Swiss banks already under criminal investigation related to undeclared accounts were excluded from the program.
A Swiss bank which DOJ deems to have met the requirements of the Swiss Bank Program, which includes a detailed disclosure of the bank’s involvement, is eligible to enter into a non-prosecution agreement. The bank is required to disclose cross-border activities, provide detailed information for accounts in which U.S. taxpayers have an interest, provide detailed information as to other banks to which funds were transferred, and pay penalties. A total of 55 Swiss banks entered into the program and collectively paid $532 million.
This announcement is the most recent of significant legal developments in 2015 for BNP Paribas, which, in May, was sentenced in the Southern District of New York for illegally processing billions of dollars of transactions through the U.S. financial system on behalf of Sudanese, Iranian and Cuban entities subject to U.S. economic sanctions. The bank was sentenced to a five-year term of probation, and ordered to forfeit $8,833,600,000, and pay a $140,000,000 fine. The sentence represented the first time that a financial institution was convicted and sentenced for a violation of U.S. economic sanctions, and it was the largest financial penalty ever imposed in a criminal case.
The DOJ-BNP Paribas non-prosecution can be found here.
Posted On Wednesday, November 25, 2015
By:
The President’s annual tradition of pardoning a turkey dates back to the 1870’s when turkeys became a regular gift to the White House for a holiday meal. While some sources erroneously trace the origin of turkey pardoning to President Truman, his presidential library denies the claim and the White House Historical Association instead reports that, in 1989, President George H. W. Bush was the first President to “officially” pardon a turkey. With the impending Thanksgiving holiday, and the final year of the Obama presidency approaching, we thought it would be appropriate to briefly examine Presidential pardon powers, albeit separate from turkeys per se.
Presidential pardon authority originates directly from the U.S. Constitution in Article II, Section 2: “The President…shall have power to grant reprieves and pardons for offenses against the United States, except in cases of impeachment.” Beyond this broad power, there are federal rules and regulations governing presidential pardons as found in 28 CFR §§ 1.1 et seq., 28 C.F.R. §§ 0.35-0.36, and the Rules Governing Petitions for Executive Clemency. Federal regulations also empower the DOJ’s Office of the Pardon Attorney to assist the President in the exercise of executive clemency, a general phrase which includes pardon, commutation of sentence, remission of fine, remission of restitution, or reprieve. Requests for executive clemency begin with an application detailing the basis for the request which are submitted to the Office of Pardon Attorney. The office investigates the request and prepares a report and recommendation for the President’s consideration and final approval.
Contrary to popular belief, though, a pardon does not “undo” a conviction. As the Office of Pardon Attorney explains, a pardon is “an expression of the President’s forgiveness and ordinarily is granted in recognition of the applicant’s acceptance of responsibility for the crime and established good conduct for a significant period of time after conviction or completion of sentence.” The Office of Pardon Attorney notes that a pardon “does not signify innocence” but it does “remove civil disabilities” resulting from a conviction.
Additionally, there are several procedural hurdles to obtaining a presidential pardon or clemency. For example, naturally the President does not have authority to grant a pardon or clemency for a state conviction because the U.S. Constitution limits pardon power to “offenses against the United States.” Further, 28 C.F.R. §1.2 states that defendants are not eligible to file a petition for pardon until at least five years after release from prison or five years after the date of conviction if imprisonment is not imposed. Defendants seeking to have a sentence commuted must also exhaust all judicial or administrative remedies before filing a petition for commutation of sentence.
