PARIS – Prosecutors have asked a French court to send the country’s former budget minister to prison for tax fraud and set an example of a necessary fight against a “world plague.”
The two-week trial of Jerome Cahuzac on charges of tax fraud and money laundering ended Thursday in a Paris court. The judge set a December 8 date for the verdict.
During closing arguments, France’s top financial prosecutor, Eliane Houlette, asked the court to sentence Cahuzac to three years in prison for inflicting a “major harm to France,” ”tarnishing its image,” ”withering its honour” and “making it the laughing stock of the entire world.”
Cahuzac, a 64-year-old former cosmetic surgeon, is accused of hiding his wealth in tax havens around the world at the same time he was leading the government’s fight against tax evasion. He was forced to resign in 2013.
The trial marked one of the biggest political scandals under Francois Hollande’s presidency and came as France and many other countries have tried to crack down on foreign tax havens.
Cahuzac and his ex-wife, Patricia Menard, have acknowledged owning hidden and illegal foreign bank accounts for two decades. They have already paid 2.3 million euros ($2.6 million) in back taxes to French authorities.
Their hidden wealth in foreign bank accounts in Switzerland, Singapore and the British tax haven of the Isle of Man was estimated at 3.5 million euros ($3.9 million) in 2013, assistant prosecutor Jean-Marc Toublanc said.
The value of their concealed assets likely was much higher because the money helped the couple finance a lavish lifestyle over the years, Toublanc said.
Branding tax evasion as a “world plague” and citing the Panama Papers scandal as a recent example, Toublanc called the Cahuzac spouses “among the biggest fraudsters” of whom French tax authorities are aware.
On trial in Paris alongside Cahuzac and his ex-wife were a banker, a legal adviser, and bank Reyl, a respectable but little-known Swiss establishment, all charged with money laundering.
During the trial, the former budget minister argued for the first time that he originally opened his Swiss account in 1992 to collect funds from drug companies. He said the money was to be used for illegal financing of a branch of the Socialist Party led by Michel Rocard, the former French prime minister who died in July.
However, Cahuzac did not provide any evidence for those claims.
After the first press reports that Cahuzac had a hidden foreign bank account surfaced in late 2012, Cahuzac publicly denied the allegations for months. He eventually admitted to the fraud in April 2013, saying he had been “trapped in a lying spiral.” French law does not sanction perjury.
With the French presidential election less than eight months away, his trial revived voters’ memories of the scandal that tarnished Hollande’s mandate just a few months after the socialist president was elected in 2012, promising an “irreproachable” and “exemplary” republic. Hollande is widely expected to seek a second term next spring.
The Cahuzac scandal damaged Hollande’s approval ratings, which took a 13-point dive during the first quarter of 2013.
During a summit in China earlier this month, representatives from the world’s 20 leading economies asked the Organization for Economic Cooperation and Development to prepare a list by 2017 of countries that are aiding or refusing to crack down on tax evaders.
The European Union on Thursday released a first country-by-country assessment regarding the risk of tax evasion. The bloc’s efforts are led by the EU’s tax commissioner, Pierre Moscovici, a former French economy and finance minister who was Cahuzac’s boss in the government.