Romeo Cerutti is a Swiss and Italian citizen who
once practiced in California. Seems that when poor Credit Suisse got news that
federal prosecutors were hot on their trail for their role in assisting
Americans to evade US taxation in Switzerland they decided to send their general counsel to meet
with the land sharks at the Justice Department. I am sure that Mr. Cerutti is a
well-trained attorney and extremely effective as general counsel but going to Washington to meet with the Justice Department is not for the
uninitiated. The New York Times reported quoting him as asking prosecutors
to: “Please don't do this.” Okay, I will
admit that when the cell phone law first past I was an easy victim. I was
driving. The phone rang. It was a client. I answered it. The county policemen
parked at the roadside took note and then took chase. Lights flashing, the
whole shebang. I finished my call as the officer sashayed up to my window.
Certain that I would only receive a warning I inquired about the chief of the
county police with whom I had gone to high school. The officer replied that he
did in fact know him and that he was doing well. I felt more comfortable. But I
did notice that he began writing in his ticket book. It's then that I recalled
using the Cerutti defense: “Ah come on, please don't do this”. The ticket at
the time was $130 I paid it promptly and billed the client for the telephone
call. Having represented a number of clients charged with tax fraud and tax
evasion before both the Internal Revenue
Service and Justice Department I would have told Mr. Cerutti, the “please don't
do this defense” does not work. Credit Suisse was forced to plead guilty to one
count of conspiring to aid tax evasion. It also admitted that its bankers
enabled clients to easily evade the American taxes over many years. Eric
Holder, Jr., the United States attorney gloating somewhat, said that “When a
bank engages in misconduct this brazen it should expect that the Justice
Department will pursue criminal prosecution to the fullest extent possible, as
happened here”. The bank has agreed to pay fines of $2.6 billion for their
role. At the moment, the bank has not been required to turn over the names of
the unfortunate American account holders. Practitioners would be wise to advise
clients that it may in fact be time to come clean and participate in the
limited amnesty program the IRS now provides. For background on that program
See a fine article on the subject: T. David and S Novak “The Undisclosed Foreign Bank Account, The Practical
Tax Lawyer, ALI-CLE, April 2014.
