Thursday, April 14, 2011

A Q&A with Jeff Neiman (4/14/11)

Readers of this blog will recognize Jeff Neiman's name. Jeff was formerly the AUSA in SD FL who took a lead role in the Government's initiatives against UBS and some of its depositors. Jeff recently left his position to enter the private practice of law. Jeff's experience on the other side will offer his clients and other lawyers unique insights into the Government's continuing initiatives and how best to maneuver around the traps in the initiatives. I offer here a Q&A with Jeff:

Q: Why did you decide to leave for private practice?
A: After nine years as a federal prosecutor, I figured if there ever was a time to give defense a shot, this was it. I am grateful for the experience and the relationships that I developed while working for the government, but personally I was ready for a new challenge.
Q: Is it going to be difficult to now defend taxpayers before the IRS and DOJ after having prosecuted taxpayers for so many years?
A: It is undoubtedly going to take some adjusting. I think the little things like remembering what side of the courtroom to sit on and not having immediate access to the courthouse with government identification are going to be more difficult to adjust to than actually defending taxpayers before the DOJ and IRS. If anything, I think my years as a tax prosecutor have put me in a good position to understand what the government is looking at in deciding what makes a case criminal, civil, or sometimes even unattainable at all. Additionally, the criminal and civil tax bar have bent over backwards to help me out. I am very grateful to have a network of practitioners from around the country to rely upon to discuss issues.

Q: What exactly is your new practice going to be focusing on?
A: Simply put, I want to represent those who are under investigation by the US government. I am willing to handle criminal and civil matters. While the practice undoubtedly is going to have a heavy tax tilt, I am also going to represent individuals under investigation by the SEC, CFTC, FDA, etc. I have to frequently remind myself that I had a life before the offshore tax matters that included investigating and prosecuting Ponzi schemes, securities and healthcare fraud, and FCPA violations.

Q: Are there any matters you are conflicted off of because of your handling of the UBS investigation and its spinoffs?
A: Yes. I am undoubtedly conflicted off any investigation relating to the original production of UBS pursuant to the deferred prosecution agreement. There may be some other matters as well. The ethical rules specifically prohibit me from handling matters that I personally handled while a prosecutor.

Q: Without divulging state secrets, where do you think the government’s enforcement actions go next?
A: I rather not guess where or who or when. One thing that is very clear is that government enforcement of offshore tax evasion is not going away anytime soon. The government just has too much information at its fingertips. Kevin has built an amazing team of young talented prosecutors at the Tax Division who are chomping at the bit to get involved in offshore matters. As the government combs through the information they have, I have no doubt that there are going to be future indictments, John Doe summonses, and resolutions with banks.

Q: What are your thoughts on the renewed voluntary disclosure program?
A: From a policy standpoint, I get it that that the government needs to treat taxpayers who come in tomorrow more harshly than taxpayers who came in last year, but why end the program? I think it would make more sense to keep the program open indefinitely, but to increase the penalty structure every six or nine months. Isn’t it the goal of the IRS to get everyone into compliance?

Q: Looking back, what were the highlights of your years as a prosecutor in the thick of the government’s offshore tax enforcement efforts?
A: That’s a tough one because we had so much fun along the way. I would have to say actually getting the hard drive with client data after the UBS DPA was one of those surreal moments. I was in DC. It was bitter cold, especially for a Floridian. Kevin had the great idea of walking to the State Department to get the hard drive. We walked what felt like 10 miles (it was probably 10 blocks). The State Department liaison had just arrived from Switzerland and he met us outside the State Department to hand us the data. He also brought us copies of the Swiss newspapers from the morning the deal was announced. I don’t speak a lick of German, but the headlines made clear that the case had created a sense of panic in the streets of Switzerland. Their largest bank just barely avoided criminal indictment and here they were, for the first time, having to turn over the names of account holders to of all people, the IRS. It wasn’t a terrorism financing case that pierced the veil of secrecy. It was a pure tax case. There were so many unbelievable ups and downs throughout the case. At times, I felt like I was living a James Bond movie. I am grateful to have been a part of the case.

Jeff contact information is:

Jeffrey A. Neiman, Esq.
The Law Offices of Jeffrey A. Neiman
100 Southeast Third Avenue
Fort Lauderdale, Florida 33394
Telephone: 954.462.1200
Facsimile: 954.688.2492


  1. Nice timely post! He's a pleasant guy and a fine lawyer. He will do well.

  2. Clearly, prosecutors are real people too.

    It would be nice, however, if the IRS would likewise view taxpayers as real people, rather than the "one size fits all" approach of the voluntary disclosure program.

    The removal of FAQ 35, for example, even for taxpayers who entered the 2009 OVDP when FAQ 35 was in effect, effectively treats all taxpayers as having willfully not filed FBARs. Even though every taxpayer's facts are different, the IRS doesn't even look at the facts, it now assumes willful non-filing and imposes the highest penalties accordingly.

    There are real people on both sides, government and populace, with real facts and individual circumstances. But to the IRS, the facts and circumstances are irrelevant in this latest switch in policy.

    This comment is not personal to Mr. Neiman, and I wish him the best of success in private practice. I have no doubt that he will represent his new clients very well.

  3. Great post and best of luck to Mr. Neiman.

    It is a little surprising though that he is focused entirely on defense, and excluded representing whistleblowers from the mix, for which his experience is tailor made. Just a thought.

    Best of luck again, Mr. Neiman with your new venture.

    And thank you Jack for bringing this to our attention.

  4. Nice read! I like the anecdote about when he was obtaining data in DC as a Floridian.

    I also liked how he gave non-expected answers to adjustments that he's going to have to make from being a public prosecutor to a private practitioner - "remembering what side of the courtroom to sit on and not having immediate access to the courthouse with government identification..."

  5. You have to commend the DoJ/IRS for its success against UBS. They assembled a very impressive case and then managed to break Swiss bank secrecy. They took a lot of risks as well. Given that 2008 was the year of the bank crises, it was clearly risky to take a major step like this against a major foreign bank. If another wave of bank failures had started, Treasury could well have hung out these folks to dry. Or the cabinet could well have decided that diplomatic relations with Switzerland (especially in imposing sanctions on Iran or in terrorist financing flows) trumped a tax investigation.

    It was a great triumph. HSBC India looks to be a much easier nut to crack. It'll be interesting to see how/if DoJ Tax proceeds against Credit Suisse or Julius Baer or other Indian banks that offer NRI accounts or Swiss cantonal banks ..

  6. Asher Rubinstein above said it well...

    It is so disheartening that this OVDI program which was designed and targeted to catch the "real Big tax Cheats" has had a disproportionate impact upon the small offender in the expat and immigrant community.

    For the small fry “real people”, you enter through the OVDI front door, but there seems to be no way out without severe life altering impacts.

    A small guy trying to come into compliance isn't rewarded for the efforts, rather the IRS wants debilitating OVDI penalties that are clearly disproportionate for the failures especially if you are residing in a retirement home overseas that had some minor rental income.

    I don't think the IRS really understands the impacts of the OVDI on real people who are not sophisticated financially and don't spend their lives immersed in the application of the technical rules and regulations of the tax code.

    Not everyone one in America has as their Chrome browser home page!

    I fear the day that not do so will be considered a "willful" violation!

    I understand their argument of a uniform OVDI penalty policy under some "fairness doctrine", but when in actual practice it produces "absurd" results that is life altering for the small fry, there should be some allowance for agent discretion that can address grossly inappropriate results.

    The OVDI has produced all kinds of technical distortions that has led to disproportionate penalties for unintentional benign or stupid errors. The practitioner literature is full of examples. In real life, there is no one size that fits all when it comes to penalties, or justice.

    Especially disturbing about the 2009 OVDI program was the “reported” rescinding of FAQ 35. This really undermines ones respect for the program. It clearly fits into the "bait and switch" category which if left as is, might have ameliorated some of the penalty distortion problems.

    Currently there is no policy on how to handle Opt Out requests if you think the 20% penalty is inappropriate. Exit requests are at a stand still, as of today, the IRS agents have no idea if discretionary power will be given back to them under the IRM guidelines.

    The OVDI may have been widely successful in netting some of the Big Guys stashing money away in secret accounts, but for the small players, like ourselves, just living normal expat/immigrant lives in another country, it is just plainly confiscatory in practice, punitive in application and not positively corrective in its compliance objective.

    In this regard, the OVDI mission has failed miserably, in my opinion.

    It is a Drone program that operates without regard to the collateral damage.

    Does anyone care at the IRS? I fear not. From their perspective, it is just an ancillary cost of prosecuting the war. Was that the intent of Congress when it passed the FBAR statutes?

    Good wishes Mr. Neiman. I hope you find a way to represent some really small players who will not be able to afford your fees to fight the IRS OVDI juggernaut.


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