Thursday, April 25, 2013

Sentencing Judge on Offshore Prosecution Chastises the Government for Lack of Judgment (4/25/13)

According to a newspaper report, the sentencing judge in the prosecution of Mary Estelle Curran of Palm Beach chastised the Government for prosecuting the case rather than resolving it civilly.  Ms. Curran was among the first group of 250 U.S. taxpayers ratted out by UBS and thus was not rejected from the OVDP program when she tried to join it.  Michele Dargan, Judge frees woman seconds after giving her probation (Palm Beach Daily News 4/25/13), here.  The Government prosecuted her.  In pleading to two counts of tax perjury (Section 7206(1)), she agreed to pay the standard 50% high amount FBAR penalty of  $26.6 million on a high account amount of $43 million.  Key excerpts:
U.S. District Judge Kenneth Ryskamp sentenced Mary Estelle Curran of Palm Beach to one year probation Thursday on tax charges, before revoking the sentence five seconds later and sending her out of the courtroom a free woman. 
Ryskamp chastised the government for prosecuting the 79-year-old woman when 38,000 other people in the same situation were given amnesty. 
* * * *\ 
“Based on these facts, did it ever occur to the government to dismiss these charges,” Ryskamp said. “Instead, the government decided it had to make a felon out of this woman?”\ 
Mark Daly, from the Department of Justice Tax Division, told Ryskamp that Curran’s husband, Mortimer, was a “very wealthy man” and shouldn’t have turned to a foreign national for an interpretation of U.S. Law.”

Another article:  Susannah Nesmith & David Voreacos, Widow Gets Less Than Minute of Probation in U.S. Tax Case (Bloomberg 4/25/13), here.  Excerpts:\

A 79-year-old widow who pleaded guilty in the largest individual case since a U.S. crackdown on offshore tax evasion began received less than a minute of probation from a judge who scolded prosecutors. 
* * * *
“This is really a tragic situation,” Ryskamp said. “It seems to me the government should have used a little more discretion.” 
Ryskamp urged Black to appeal to the president to pardon Curran. 
“If the government doesn’t join in that, it’s just spiteful,” the judge said. 
Mark Daly, a Justice Department trial attorney, declined to comment after the hearing. Daly didn’t oppose Black’s request for probation. 
* * * * 
‘Unassuming Life’ 
Black argued in court papers that Curran’s “frugal and unassuming life despite her wealth” was one of the reasons the judge should sentence her to probation. 
He also said it would be unfair to send her to prison when 38,000 U.S. taxpayers with offshore accounts have avoided prosecution since 2009 by entering the limited amnesty program, paying back taxes and identifying those who helped them hide their accounts from authorities. 
Hundreds of taxpayers in the program gave prosecutors information that has helped build criminal cases against bankers and advisers. To be eligible for the voluntary disclosure program, taxpayers had to approach the IRS before the tax agency or the Justice Department learned about their offshore accounts. 
Curran admitted that from 2001 to 2008 she failed to file Reports of Foreign Bank and Financial Accounts. As a penalty, she had to pay half of the highest annual balance $26.8 million. She also acknowledged that she filed false tax returns for 2006 and 2007 and that she failed to tell her accountant about her offshore accounts. 
Never Seen 
Curran’s lawyer Nathan Hochman, who has practiced law for 25 years as a prosecutor and defense attorney, said he had never seen a sentencing like Curran’s. 
“Judge Ryskamp’s sentencing is unprecedented in a number of respects: calling the government’s case against Mrs. Curran ‘tragic’ and ‘unfortunate,’ putting her on probation for effectively five seconds, urging Mrs. Curran to file a pardon application with the president, and telling the prosecutors they would be spiteful to oppose it,” Hochman said.


  1. It is nice to see that there are judges like that. Kudos to him. He reminds me of judge Rambo who prevented the deportation of Purpura by reverting his guilty plea in the false tax return conviction that resulted in no loss for the US. Hopefully, the Justice Department will take that into account when making the decision to persecute taxpayers.

  2. I don't think I have ever heard the term "backed into a corner" in regards to these types of cases. How much of an effect does it have on the government. My initial view was this case looks very bad for DOJ Tax and Kristina Keneally as they made a lot of noise about this particular prosecution. (I felt like commenting that perhaps it was time for Ms. Keneally to resign). Having said that it does not appear as if the trial attorney for the government at all strenuously objected to the sentence once he realized which way the wind was blowing with the trial judge.

    If appeals is willing the overturn the sentence isn't the only logical course is to send the case back to a different judge(but in the same district) and start all over again(I can't see how appeals at this point could remand it back to the same judge plus this judge is on "Senior" status so its not like he is looking for an appellate appointment). That doesn't appear to be a great course for the government to follow especially. There are only three other judges at this particular federal court(The other three of course aren't on "Senior" status so perhaps they would be more malleable).

    Now the comment I really wanted to make is the fact that while the government seems to have a pretty good record in the Southern District of NY they seem to be doing quite poorly in places like Wisconsin, Hawaii, and now W. Palm Beach FL.

  3. I will also add if you Google the judge's name(I just did) he has long history of controversy including a blocked nomination by the Senate Judiciary Committee back in 1991. More recently he has ruled against the government in several cases on what some have called "dubious" grounds. Of course the local USAO might not want to piss him any more than they have already done as long as he stays on the bench in a position to cause them trouble.

    Again perhaps the real story is the government is not doing so well in tax cases outside the SDNY.

  4. Did the government really have the option of ignoring the statutory requirements for eligibility for the amnesty program? I suspect not, and if that's the case, the best they could do to help her out was to seek only probation, on top of the back taxes and penalties (which she would have had to pay even if she had qualified for amnesty.)

    At the end of the day, she got everything she could have hoped for, albeit with the downside of having a felony conviction on her record. I suspect that Obama will clear up that last detail, if she cares to ask.

  5. “This is really a tragic situation,” Ryskamp said. “It seems to me the government should have used a little more discretion.”

    I'm sure he says that in cases involving non-white, non-wealthy defendants.

  6. Although the judge could have used more diplomatic language, I do see a disconnect between the first 250 having had their information disclosed NOT being allowed into the program, and the thousands of others who followed being placed into the program. There is a fundamental question of she (and the other 249) not being given the same deal as the others.


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