U.S. Taxpayers Fined $1,000/Day in Foreign-Account Probe

A judge imposed fines of $1,000 a day on five unidentified taxpayers after holding them in contempt for failing to obey U.S. grand jury subpoenas seeking information on their foreign bank accounts.

U.S. District Judge William Pauley in Manhattan imposed the fines yesterday, delaying their effect until after a federal appeals court can decide an anticipated challenge in the case. The subjects of the subpoenas claim they can’t be forced to turn over the records, citing their constitutional right against forced self-incrimination.

The subpoenas were issued from October 2010 to May 2012 by a grand jury in Manhattan that was investigating whether the five had financial interests in foreign bank accounts that they failed to disclose to U.S. tax authorities. The subpoenas seek all records of foreign accounts exceeding $10,000, according to Pauley.

In February, Pauley rejected arguments by the five that they’re shielded by the Fifth Amendment to the U.S. Constitution and the Bank Secrecy Act. In his order yesterday, Pauley said the subjects continue to refuse to comply with the subpoenas.

The case is In Re Various Grand Jury Subpoenas, 12-mc-00381, U.S. District Court, Southern District of New York (Manhattan).

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