Free Financial Management Story: Ricci Heiress Convicted Of Tax Fraud Essay Sample

BBC Business

Ricci Heiress Convicted of Tax Fraud
Ms. Ricci, the heir to the Nina Ricci perfume and fashion fortune was accused and convicted by a Paris court of hiding millions of euros to evade tax from the French authorities by banking the cash in an offshore HSBC account. The 73 years old heiress was sentenced to a one year imprisonment and ordered to settle a fine of €1 million. The court further ordered for confiscation of her two properties valued to be worth €4 million.
There have been undertakings of some investigations over the HSBC’s Swiss private banking arm after unravelling leak accusing it of large scale tax fraud.
Besides the one-year custodial sentence, Ms. Ricci was also given a two-year suspended sentence though she can appeal the verdict. Even her daughter of 51 years old, Margot Vignat, was also a convict and was given a suspension sentence of eight month.
The court ordered one Ms. Ricci to pay millions of euros in back taxes for the period of 2007-2009, with a similar amount to be set at a date later. Though her lawyer, Jean-Marc Fedida, made claims that her client had been made an example of, terming her sentence “extremely severe.” The lawyer opted of asking the Judge to let the defendant serve her sentence under lenient conditions, for example, putting on an electronic tag or partial liberty.
Ms. Ricci was quoted admitting over a phone conversation that “I believe I did the right thing, and I never hear from Bercy, so all is well,” referring to French Finance Ministry. “Yes, inevitably, necessary because all that is illegal anyway,” she further remarked.
Ms. Ricci became the first of the 50 French nationals accused of tax evasion in the HSBC case. Her being prosecuted was viewed as a test case for the termed “Swissleaks” scandal.

The rationale of the story in financial management

Financial managers come across the fraud of tax evasion in several business operations from institutions and individuals perspectives as well. This is the illegal means of avoiding to pay taxes. That is, schemes of income misrepresentation to the Internal Revenue Service. As described by Pickhardt (2012) misrepresentation takes the form of inflating deductions, underreporting income, or concealing money and its interest in offshore accounts.
As a finance manager, it safer to ensure complete remittance of taxes with the authorities. Any willful attempt of any manner to evade or defeat imposed tax upon conviction and besides other penalties shall be guilty of felony.

References

Nina Ricci Heiress Convicted of Tax Fraud in HSBC case - NBC News. (2015). Retrieved April 14, 2015, from http://www.nbcnews.com/business/business-news/nina-ricci-heiress-convicted-tax-fraud-hsbc-case-n340626
Organisation for Economic Co-operation and Development. (2010). International tax avoidance and evasion: Four related studies. Paris: Organization for Economic Co-operation and Development.
Pickhardt, M. (2012). Tax evasion and the shadow economy. Cheltenham, Glos, UK: Edward Elgar.