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December 9, 2016

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Ex-French minister jailed for tax fraud

Source: AP | December 9, 2016, Friday | Print Edition

FORMER French budget minister Jerome Cahuzac was sentenced yesterday to three years in prison in one of the biggest political scandals of President Francois Hollande’s government.

A Paris court ruled that Cahuzac was guilty of tax fraud and money-laundering for hiding his wealth in tax havens around the world. The court said Cahuzac committed irregularities “of an extraordinary and rare seriousness.”

Cahuzac, 64, who has also been banned from running for office for five years, can appeal the ruling and will remain free in the meantime.

Cahuzac and his ex-wife Patricia Menard have acknowledged owning illegal foreign bank accounts for two decades. They have already paid 2.3 million euros (US$2.5 million) in back taxes to French authorities. Menard was sentenced to two years in prison for tax fraud.

As budget minister, former cosmetic surgeon Cahuzac hid his wealth at the same time as he was leading the government’s fight against tax evasion.

The hidden wealth of the couple was estimated at 3.5 million euros in 2013, when Cahuzac was forced to resign after only 10 months in office. But the real value likely was much higher because the money helped the couple finance a lavish lifestyle over the years, prosecutors have said.

The fortune was concealed in bank accounts in Switzerland, Singapore and the British tax haven of the Isle of Man, after transiting sometimes through dummy companies in Panama and the Seychelles, according to court documents.

During the trial in September, prosecutors blamed the former minister for making France “the laughing stock of the entire world” and called the couple “among the biggest fraudsters” of whom French authorities have been aware.

Before becoming a prominent Socialist politician, Cahuzac built his as a plastic surgeon in the hair transplantation clinic he operated with his ex-wife, a 61-year-old dermatologist, and as a consultant for big pharmaceutical laboratories.

On trial alongside Cahuzac and his ex-wife were a banker, a legal adviser, and Swiss bank REYL, a low-profile firm.

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