Grand Jury Target Must Turn Over Bank Records - U.S. Fifth Circuit
U.S. Fifth Circuit - The FindLaw 5th Circuit Court of Appeals Opinion Summaries Blog

Grand Jury Target Must Turn Over Bank Records

The Fifth Circuit Court of Appeals ruled this week that a grand jury investigation target must turn over records and documents pertaining to foreign bank accounts which were used to evade U.S. taxes, Talk Radio News reports.

While a district court had previously held that the target could invoke the Fifth Amendment to avoid disclosure, the appellate court concluded that the government is allowed to demand the documents under the Required Records Doctrine.

The witness in this case is the target of a grand-jury investigation seeking to determine whether he used secret Swiss bank accounts to evade his federal income taxes.

In February 2009, following an investigation into its cross-border banking business, the Swiss investment bank UBS entered into a deferred-prosecution agreement with the Justice Department under which UBS admitted to conspiring to defraud the U.S. government by helping taxpayers commit tax evasion. UBS provided the account records of approximately 250 of these taxpayers, including the witness.

The grand jury subsequently subpoenaed the witness to produce any records of foreign bank accounts he was required to keep under Treasury Department regulations governing offshore banking. The witness informed the government that he would not comply with the subpoena, citing his Fifth Amendment privilege against self-incrimination. The district court denied the government's motion to compel the witness to comply.

When the government challenged that ruling on appeal, the Fifth Circuit essentially responded, "Self-incrimination? Pfft." (Yes, that's paraphrased.)

Applying the three-prong reasoning from Grosso v. United States, the Fifth Circuit held that the Bank Secrecy Act's record-keeping requirement is "essentially regulatory," the records sought are of a kind "customarily kept" by account holders such as the witness, and the records have assumed "public aspects," so the witness had to comply with the subpoena under the Required Records Doctrine.

Do you agree with this ruling, or should the Fifth Amendment trump the Required Records Doctrine?

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