US v. Schussel, No. 07-2095 (8/29/08) (unpublished). Again, why the hell was this unpublished. This is freakin’ major case in criminal and tax practice. What the hell is the First thinking? Are they trying to hide something? Or are they trying to avoid writing a “precedential” case on tax privilege issues, because there are other ones in the pipeline which are not criminal -- yet. Essentially this is what happens when you think you can hide assets in Bermuda and hope that it all turns out okay in the morning. I don’t have too much sympathy for this kind of person. He also fabricated documents, and tried to replace computerized records. I know a couple of the actors in this case (and they luckily they are documented as behaving ethically as they always do). However, this case demonstrates the principles in tax practice known as “what goes around comes around.”
In October 2001, Darlene Flint, who had worked as Gomes’ secretary for 18 years, walked into the IRS office in Stoneham, Massachusetts, with a box of DCI records that included the Bermuda account records. This disclosure triggered a criminal investigation of DCI and its employees
It also demonstrates why certain kinds of tax clients are really a bitch to deal with, and what sort of trouble tax lawyers flirt with. Anyway, back to that law stuff.
The biggest problem with this opinion is that the First seems not to understand that there is a difference between rules of professional responsibility and privilege. Rules of professional responsibility generally govern the relationship between the client and the lawyer. Usually they are written to make it easier to represent a client, and in the case of privileges, many rules reflect our common-law understanding of such privileges. But these are different issues. The First seems to flip back and forth between privileges and rules of professional responsibility to reach the result it wants. This makes this one of the worst opinions of the year.
Looking at the actual holdings... oh wait. They appear below the fold.