Arthur Bedrosian v. IRS

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 21-1583
ARTHUR BEDROSIAN,
Appellant
v.
THE UNITED STATES OF AMERICA, DEPARTMENT
OF THE TREASURY, INTERNAL REVENUE SERVICE
________________
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 2-15-cv-05853)
District Judge: Honorable Michael M. Baylson
________________
Argued on March 2, 2022
Before: McKEE, AMBRO, and SMITH, Circuit Judges
(Opinion filed: July 22, 2022)
Ian M. Comisky [Argued]
Siana Danch
Patrick J. Egan
Beth L. Weisser
Fox Rothschild
2000 Market Street
20th Floor
Philadelphia, PA 19103
Counsel for Appellant
Paul A. Alluis [Argued]
Michael J. Haungs
United States Department of Justice
Tax Division
950 Pennsylvania Avenue, N.W.
P.O. Box 502
Washington, DC 20044
Francesca Ugolini
United States Department of Justice
Tax Division
Room 4633
950 Pennsylvania Avenue, N.W.
P.O. Box 502
Washington, DC 20044
Counsel for Appellee
____________
OPINION OF THE COURT
____________
2
AMBRO, Circuit Judge
The Bank Secrecy Act, 31 U.S.C. § 5311 et seq., and its
implementing regulations require certain individuals with
foreign financial interests to file annual disclosures with the
U.S. Treasury Department. Those failing to file or filing
inaccurate reports are subject to hefty penalties. Take
Appellant Arthur Bedrosian’s experience. In 2008, he filed an
inaccurate Report of Foreign Bank and Financial Accounts
(FBAR) with the Government, omitting from the report the
larger of his two Swiss bank accounts. If this omission was
accidental, the IRS could fine Bedrosian up to $10,000. But if
he willfully filed an inaccurate FBAR, the penalty skyrockets:
the greater of $100,000 or half the balance of the undisclosed
account at the time of the Bank Secrecy Act violation.
Believing Bedrosian’s omission was willful, the IRS took the
latter option and imposed a $975,789.17 penalty—by its
calculation, half the balance of Bedrosian’s undisclosed
account.
Following Bedrosian’s refusal to pay the full assessed
penalty, the IRS filed a claim in federal court to collect. A
bench trial, appeal, and remand ended with the District Court
finding Bedrosian’s omission willful and ordering him to pay
the IRS penalty in full. Now on appeal again, Bedrosian claims
the Court erred by finding his conduct willful and in
calculating the penalty amount. We affirm the Court’s
willfulness finding. And while we agree the Government
failed to provide sufficient evidence at trial showing its
$975,789.17 penalty was no greater than half his account
balance, Bedrosian admitted this fact during opening
statements and thus relieved the Government of its burden of
proof. We therefore affirm the District Court’s judgment.
3
I. Background
Arthur Bedrosian held two bank accounts with the
Union Bank of Switzerland (UBS). The first he opened while
a young pharmaceutical sales executive so he could have easy
access to cash when traveling overseas. The second he
acquired decades later after accepting a loan and investment
proposal from the bank. He disclosed neither to the Federal
Government until 2008, despite his accountant telling him
years earlier that he was breaking the law by failing to note a
foreign account on his personal tax returns.
When Bedrosian finally disclosed his foreign holdings
in the required FBAR, he left out a key piece of information.
The filed form listed just one Swiss bank account with a
balance of less than $1 million, even though he later admitted
knowing his holdings at UBS were “over a million dollars.”
Appx. at 12, 137. The form also failed to reflect Bedrosian’s
ownership of a second Swiss bank account.
These omissions eventually surfaced, and the IRS
assessed the maximum penalty against Bedrosian for willfully
filing an inaccurate FBAR: 50% of the balance of the
undisclosed account at the time of the violation, which it
calculated to be a $975,789.17 penalty. He refused to pay. The
dispute thus arrived at federal court when the IRS filed a claim
to collect its civil penalty.1 See 31 U.S.C. § 5321(b)(2).
1
Bedrosian also brought his own suit for unlawful exaction.
Bedrosian v. United States, 912 F.3d 144, 149 (3d Cir. 2018).
Yet we expressed skepticism about our jurisdiction over that
claim. Id. Instead, we focused on the Government’s
counterclaim. Id. at 150.
4
At first, Bedrosian prevailed. After a one-day bench
trial, the District Court found the Government failed to prove
he willfully filed an inaccurate FBAR. The evidence, it said,
did not reflect “conduct meant to conceal or mislead or a
conscious effort to avoid learning about the reporting
requirements.” Appx. at 598 (internal quotation marks
omitted). So the omission of the second Swiss account was, if
anything, negligent.
Bedrosian’s victory was short-lived. On appeal, we
remanded after explaining “willfulness” for an FBAR violation
was more expansive (and less forgiving) than the District Court
may have allowed. Bedrosian v. United States, 912 F.3d 144,
153 (3d Cir. 2018). At bottom, willfulness includes not only
knowing, but reckless, conduct. Id. at 152. And, we said,
courts should use an objective standard to determine whether a
person knew or should have known about an “unjustifiably
high risk of harm.” Id. at 152–53 (quoting Safeco Ins. Co. of
Am. v. Burr, 551 U.S. 47, 68 (2007)). In layman’s language, if
the Government could show Bedrosian (1) “clearly ought to
have known” (2) “there was a grave risk” the FBAR filing
requirement “was not being met,” and if (3) he “was in a
position to find out for certain very easily,” it would satisfy the
willfulness element. Id. at 153 (quoting United States v.
Carrigan, 31 F.3d 130, 134 (3d Cir. 1994)). Because we were
unsure whether the Court applied this test, we remanded “for
further proceedings consistent with our opinion” and for the
Court to “render a new judgment.” Id. at 147, 153.
The IRS prevailed on remand. The District Court said
its earlier decision focused too heavily on Bedrosian’s
subjective intent. But after reevaluating the trial record from
an objective viewpoint, it determined Bedrosian acted willfully
because he “recklessly disregarded the risk that his FBAR was
5
inaccurate.” Appx. at 11. The Court also ordered him to pay
the penalty in the amount the IRS calculated (plus interest)
because the agency had “not abused its discretion in the amount
of the penalty imposed.” Id. at 17. He now appeals.
II. Analysis2
The amount of a civil penalty for a violation of the Bank
Secrecy Act depends on three things: (1) whether the violation
was willful, (2) the calculation of the maximum penalty
permitted by law, and (3) the IRS’s discretionary decision
whether to assess a penalty at or below the statutory maximum.
31 U.S.C. § 5321(a)(5). This appeal focuses on the first two
components. Bedrosian argues, first, that the District Court
clearly erred in finding his conduct willful, and second, that the
Court incorrectly affirmed a penalty beyond what the IRS
proved was permitted by law. We address each in turn.
A. Willfulness
So far, Bedrosian’s case has turned mainly on the
meaning of “willfulness” in the penalty provisions for
violations of the Bank Secrecy Act. As already explained, we
set out the definition of “willfulness” in Bedrosian and left it
to the District Court to apply that definition as it reconsidered
the trial evidence. 912 F.3d at 153–54. The Court did so—
making supplemental factual findings where needed—and
concluded Bedrosian’s conduct was indeed willful. Bedrosian
now challenges that finding on two fronts: (1) the Court
2
As we explained in Bedrosian, the District Court had
jurisdiction under 28 U.S.C. § 1345. 912 F.3d at 150. And we
have appellate jurisdiction under 28 U.S.C. § 1291 to review
the Court’s final judgment. Id.6
exceeded the scope of the remand by making supplemental
findings that led to its conclusion he acted willfully, and (2) his
conduct was not willful. We disagree on both.
It is unremarkable to say that, on remand, a district court
must comply with the “letter and spirit of the mandate” issued
by the court of appeals. Bankers Tr. Co. v. Bethlehem Steel
Corp., 761 F.2d 943, 949 (3d Cir. 1985). So what was the
scope of our Bedrosian mandate? Bedrosian insists we
remanded only “to confirm that the District Court’s result
would be the same under the now-settled standard,” not for it
to reopen the evidentiary record and make or reconsider factual
findings. Bedrosian Br. at 26. But we read our opinion
differently.
Bedrosian imposed few remand restraints on the
District Court. After stating our willfulness rule, because we
were “unsure whether the District Court evaluated Bedrosian’s
conduct under this objective standard,” we decided it was best
to give the trial court the opportunity to reassess the evidence.
912 F.3d at 153–54. So we “remand[ed] the case for further
proceedings consistent with [our] opinion.” Id. at 54. We
placed no limitation on these proceedings. Instead, our opinion
actually anticipated that the Court would reconsider its factual
findings and its judgment. For example, after answering the
legal question in the appeal, we declined to address potential
factual errors raised by the Government, choosing instead to
“leave it to the District Court if it needs to [correct these issues]
on remand.” Id. at 151 n.3. We then “remand[ed] for further
consideration” and for the Court “to render a new judgment”
(allowing it to change its mind on its ultimate holding). Id. at
153. Though our opinion did not explicitly state the Court
could review the full record and make supplemental factual
7
findings, doing so was well within the “spirit of the mandate.”
Bankers Tr. Co., 761 F.2d at 949.
We also are not convinced the District Court erred in
finding Bedrosian’s conduct willful. We review this factual
determination for clear error. Bedrosian, 912 F.3d at 152. It
“exists only if a finding is completely devoid of a credible
evidentiary basis or bears no rational relationship to the
supporting data.” Interfaith Cmty. Org. v. Honeywell Int’l,
Inc., 399 F.3d 248, 254 (3d Cir. 2005) (internal quotation
marks omitted) (alterations adopted).
Here the Court’s rational decision was grounded in
credible evidence. Its thorough and well-reasoned opinion
reconsidered whether—based on the evidence presented at the
bench trial—Bedrosian “clearly ought to have known that
. . . there was a grave risk that an accurate FBAR was not being
filed and if . . . he was in a position to find out for certain very
easily.” Bedrosian, 912 F.3d at 153 (internal quotation marks
omitted) (alterations adopted). To aid this analysis, the Court
made five supplemental findings:
1. “Bedrosian’s cooperation with the Government
. . . began only after he was exposed as having
hidden foreign accounts.” Appx. at 5.
2. “Shortly after filing the 2007 FBAR, Bedrosian
sent two letters to his Swiss bank directing
closure of two accounts, but only one of these
accounts had been disclosed on his FBAR.” Id.
at 5; see also id. at 139.
3. “Bedrosian does not dispute he saw an article in
The Wall Street Journal about the federal
8
government tracing mail coming into the United
States and was therefore alerted to the possibility
of the United States finding out about his foreign
bank accounts if the bank sent information
through the mail.” Id.; see also id. at 96.
4. “Bedrosian’s Swiss accounts were subject to a
‘mail hold.’ He does not dispute the existence of
the mail hold or that he signed a form and paid a
fee to the bank for this benefit.” Id. at 6; see also
id. at 135.
5. “Bedrosian also acknowledged that he was
aware of the significant amount of money held in
his foreign bank accounts.” Id. at 6; see also id.
at 137.
The trial record supported each finding.
Relying on these facts, the Court found Bedrosian acted
recklessly (and therefore willfully under our test) because he
“knew or should have known the form which he signed was
inaccurate.” Id. at 13. He checked a box on the FBAR
reflecting there was less than $1 million in his account. Yet at
trial he said he knew his main account had “over a million
dollars in it.” Id. at 12, 137. So even if he did not know he had
two accounts, the FBAR stating the account held less than a
million dollars “should have prompted him to investigate
further, which he could have done easily by contacting the
bank.” Id. at 12. Indeed, had he “looked at the forms he
signed,” Bedrosian “should have noticed the amount stated for
the accounts was not accurate.” Id. Further, he was warned by
his accountant that he was breaking the law by not disclosing
9
his accounts to the Government, yet he made no change. Id. at
12, 98.
Applying the Bedrosian definition of willfulness to
these facts, the District Court properly determined Bedrosian
acted willfully by failing to disclose his second Swiss bank
account on the FBAR.3 We certainly cannot conclude it clearly
erred.
One further note. Bedrosian invites us to revisit our
Bedrosian test for willfulness, but we decline to do so under
the law-of-the-case doctrine. That doctrine prevents
reconsideration of legal issues already decided in earlier stages
of a case. Pub. Int. Rsch. Grp. v. Magnesium Elektron, 123
F.3d 111, 116 (3d Cir. 1997). Though Bedrosian correctly
notes an exception when the earlier decision was “clearly
erroneous,” id. at 117, he identifies no on-point binding
precedent with which Bedrosian conflicts,4 see Pardini v.
3
Bedrosian also criticizes the District Court for the analogies
it drew between his case and the Fourth Circuit’s decision in
United States v. Horowitz, 978 F.3d 80 (4th Cir. 2020), where
that Court found the defendant’s FBAR violation willful. Even
if he is correct that the District Court incorrectly likened his
case to Horowitz, this makes no difference. Horowitz is an out-
of-circuit, non-binding precedent, so the similarity or
dissimilarity of his case is irrelevant. All that matters here is
that the District Court found Bedrosian’s conduct satisfied our
test for willfulness.
4
Even had he shown our decision was wrong, it likely would
be up to our Court en banc, not our panel, to modify that
decision. See 3d Cir. I.O.P. 9.1. This is especially true now
that another of our Court’s precedential opinions has adopted
and applied the test we set out in Bedrosian. See United States
v. Collins, 36 F.4th 487, 491 (3d Cir. 2022).
10
Allegheny Intermediate Unit, 524 F.3d 419, 426–27 (3d Cir.
2008) (noting we would not have to follow the law-of-the-case
doctrine if a prior opinion clearly erred by disregarding binding
precedent). Our earlier decision thus stands.
B. Maximum Penalty
Willfulness, though, is just the first hurdle the
Government must overcome to collect the penalty it assessed
against Bedrosian. The statute also limits the IRS’s authority
in other ways, particularly by setting a maximum penalty.
Once a violation of the Bank Secrecy Act is found to be willful,
the IRS has two options: impose up to the greater of a $100,000
penalty or assess a penalty of up to “50 percent of the amount
. . . [of] the balance in the account at the time of the violation.”
31 U.S.C. § 5321(a)(5)(C), (D). The Government has
discretion to assess a penalty up to the statutory maximum.
The maximum penalty amount—like willfulness—is an
element of the cause of action to collect the penalty. See 31
U.S.C. § 5321(a)(5)(C). So, also like a determination of
willfulness, it is a factual finding the District Court must make
based on the evidence presented at trial. Once that statutory
maximum is properly calculated, the Court may only set aside
the IRS’s discretionary determination of whether to impose the
maximum or some lesser amount “if it was arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” United States v. Collins, 36 F.4th 487,
493 (3d Cir. 2022) (Collins II)5; see also Frisby v. U.S. Dep’t
5
In Collins, the statutory maximum penalty was not at issue
(as it is here) because the District Court found the defendant
admitted to his account balances. See No. 18-cv-1069, 2021
WL 456962, at *1–2 (W.D. Pa. Feb. 8, 2021) (Collins I); see
11
of Hous. & Urb. Dev., 755 F.2d 1052, 1055 (3d Cir. 1985)
(“Where Congress has granted an agency discretion, the
resulting decisions are subject to judicial review only to
determine whether the Secretary has exceeded statutory
authority or has acted arbitrarily.”).
Facts underlying the calculation of the maximum civil
penalty—in this instance, the account balance—must be
proven by a preponderance of the evidence. See, e.g., Herman
& MacLean v. Huddleston, 459 U.S. 375, 389–90 (1983)
(noting the burden of proof in civil cases is preponderance of
the evidence and “imposition of even severe civil sanctions
. . . has been permitted after proof by a preponderance of the
evidence”). And because the Government brought this civil
action under 31 U.S.C. § 5321(b)(2) “to recover a civil
penalty,” it bore the burden of proving the account balance at
trial—again, in the same way it did the element of willfulness.6
Collins II, 36 F.4th at 494 (“Collins’s penalty is well below the
amount permitted by law.”). Indeed, the IRS imposed a
penalty 75% below the maximum penalty in that case, so there
was no argument that the IRS exceeded its statutory authority.
Collins II, 36 F.4th at 494; see also Kimble v. United States,
991 F.3d 1238, 1242, 1243–44 (Fed. Cir. 2021) (reviewing for
abuse of discretion the IRS’s decision to impose the maximum
civil FBAR penalty and not lessen the penalty due to mitigating
factors).
6
The Government must prove the account balance only
because it chose the option under the statute to penalize
Bedrosian at 50% of the balance of his undisclosed account.
Had the Government chosen the other maximum penalty
option—$100,000 for each violation—the account balance
12
The Government contends Bedrosian’s undisclosed
bank account held $1,951,578.34, making its $975,789.17
penalty lawful. But Bedrosian claims it failed to prove this
fact, particularly because it pulls this figure from arguably
inadmissible evidence. And, he says, the District Court abused
its discretion by admitting and ultimately relying on this
evidence to uphold the IRS’s imposition of the civil penalty.
1. Admissibility of Evidence
At trial, the Government presented no live testimony
discussing Bedrosian’s bank accounts.7 Instead, at the close of
its case and without a witness, it tried to introduce a series of
documents, including Exhibit R (the record the Government
claims establishes the balance in Bedrosian’s Swiss account),
Exhibit S (showing the Swiss Franc to U.S. Dollar exchange
rates for 2006 through 2011), and Exhibit T (converting the
account balances in Exhibit R into U.S. Dollars using the
Exhibit S exchange rates). Bedrosian objected, claiming there
was a lack of foundation to introduce these exhibits. And the
Court reserved its ruling on the admissibility of the documents
until the parties provided more briefing. Ultimately, it only
resolved this issue after our remand, when it appears to have
would be irrelevant. Instead, it would only need to prove a
willful violation of the Bank Secrecy Act.
7
The Government offered only one witness: an IRS employee
who prepared the letter assessing the penalty against
Bedrosian. She explained that she had no role in calculating
the penalty amount and no idea how the penalty was calculated.
She simply received a sheet of paper from an IRS agent stating
the penalty amount and entered it into the system to generate
the official penalty certificate.
13
admitted the documents and relied on them to uphold the IRS’s
penalty.
The legitimacy of the IRS’s penalty centers on the
admissibility and the contents of Exhibit R. This exhibit
consists of a single page and appears to be a record of some
account. See Appx. at 528. The heading reads “monthly
balances” and below it is a monthly breakdown of numbers
from 2001 to 2008. On the left side of the page is a string of
numbers, “D3.US.642/174-D1540_2_00001,” which looks
like a Bates stamp identifier from discovery.
See id.Exhibit R is admissible only if relevant. See Fed. R.
Evid. 402. And here the relevance of this document hinges on
whether it reflects the balance of Bedrosian’s undisclosed
Swiss bank account, as the Government claims it does. After
all, the random account statement of some other person
14
banking with UBS or any other bank would have no bearing on
what civil penalty Bedrosian owes the IRS. The Government,
though, offered no foundation tying Bedrosian or his UBS
account to this exhibit.8
Take a closer look at the exhibit. There is no name on
the page. No account number. Not even a bank mentioned.
There are numbers on the page, but no listed currency.
Presumably because it is a “monthly statement,” it is showing
an account balance (though it could even be a balance for an
unpaid bill). And are the stated balances in Swiss Francs? U.S.
Dollars? Euros? We simply don’t know. There is a Bates
number on the side of the page stating, “D3.US.642/174-
D1540_2_00001,” but nothing in the record explains what that
number means.9 Indeed, because the Government tried to enter
8
The Government explains that Exhibit R was a self-
authenticating business record that could be submitted into
evidence without a live witness under Federal Rule of
Evidence 902(12) because it was accompanied by a custodian
certification (Exhibit U). Perhaps so. But authenticity and
relevance are “two separate matters.” United States v.
Southard, 700 F.2d 1, 23 (1st Cir. 1983). A business record
may be self-authenticating, but there must still be “testimony
linking the [defendant] with the documents” to establish
relevance. Id.; see also United States v. Browne, 834 F.3d 403,
410 (3d Cir. 2016).
9
For the first time on appeal, the Government points to the
Bates stamp numbers to tie this document to Bedrosian. It
claims other exhibits with similar Bates numbers “confirm that
this Bates range concerns Bedrosian.” IRS Br. at 62. The
problem, though, is it failed to lay this foundation through
testimony at trial. This is simply a hypothesis; there is no
evidence explaining the Bates number ranges or tying these
15
Exhibit R into evidence without a witness laying a foundation,
the Court had no help identifying or explaining its contents.
All we know from the record is Exhibit R shows
someone’s “monthly balance” for something somewhere. The
Government’s attorneys in briefing now tell us it is a UBS
“statement showing monthly account balances for Bedrosian’s
6137 account stated in Swiss francs,” IRS Br. at 60–61, but
nothing in evidence at trial supports that claim. And without
the Government laying the foundation to show Exhibit R states
the monthly balances for Bedrosian’s unreported bank account,
it is just a slip of paper with no relevance to this case. We
therefore conclude the District Court should not have admitted
Exhibit R without further foundation. And, consequently, this
document cannot confirm that the IRS’s $975,789.17 penalty
was 50% of Bedrosian’s account balance.
2. Judicial Admissions
Exhibit R was the only evidence the Government
submitted that purportedly showed the balance of Bedrosian’s
undisclosed account. But it isn’t the only indication in the
record of the account balance. The Government also argues
Bedrosian’s counsel admitted that the account contained
$1,951,578.34, and that this was a binding judicial admission.
Judicial admissions are “admissions in pleadings,
stipulations or the like which do not have to be proven in the
same litigation.” Anderson v. Commissioner, 698 F.3d 160,
167 (3d Cir. 2012) (internal quotation marks omitted)
(alterations adopted). They must be “unequivocal,” id., or as
Bates numbers to Bedrosian. The Government cannot rectify
this lack of foundation now on appeal.
16
other Circuits have said, “intentional, clear, and
unambiguous,” In re Motors Liquidation Co., 957 F.3d 357,
361 (2d Cir. 2020) (collecting cases).
Here the Government identifies four statements
Bedrosian made through his counsel in briefing or at trial that
it believes constituted judicial admissions:
1. Bedrosian’s Response to the Government’s
Statement of Undisputed Material Facts in
Support of Summary Judgment: “Admit[ting]”
that “the penalty was calculated as 50% of
Bedrosian’s account balance for the account
ending in 6167, or fifty percent of $1,951,578.34,
which equals $975,789.17.” Doc. 22-3 ¶ 51; Doc.
26-1 ¶ 51.
2. Bedrosian’s Statement of Undisputed Material
Facts in Support of Summary Judgment: “On or
about July 18, 2013 the IRS imposed upon the
plaintiff a willful penalty for failure to file[] [an
FBAR]. . . . The maximum value of the account
was $1,951,578.34 and the amount of the penalty
was $975,789.19—half the value of the account
and the highest penalty that could be imposed.”
Doc. 25-1 ¶ 35–36.
3. Bedrosian’s Trial Brief: “On or about July 18,
2013 the IRS imposed upon the plaintiff a willful
penalty for failure to file[] [an FBAR]. . . . The
maximum value of the account was
$1,951,578.34 and the amount of the penalty was
$975,789.19—half the value of the account and
17
the highest penalty that could be imposed.” Doc.
49 at 5.
4. Bedrosian’s Opening Statement: “Now, the
government states and we concede that at the time
there was about 2 million U.S. dollars in that
account give or take, you know, you have the
exchange rate and all, it’s like 2.6 Swiss francs
and they’ll have a witness that gets up and does
the math, but it works out to about around 2
million dollars.” Appx. at 66.
The District Court has discretion to treat a party’s
statement as a judicial admission and to bind the party to that
admission. See Cooper v. Carl A. Nelson & Co., 211 F.3d
1008, 1014 (7th Cir. 2000); Singer v. State Farm Mut. Auto.
Ins. Co., 116 F.3d 373, 376 (9th Cir. 1997). But here the Court
did not decide whether these were judicial admissions, finding
instead that the Government’s evidence (which we have now
held inadmissible) was sufficient.
Still, even though the District Court did not address this
argument, we “may affirm on any basis supported by the
record, even if it departs from the District Court’s rationale.”
TD Bank N.A. v. Hill, 928 F.3d 259, 270 (3d Cir. 2019). And
while arguably some of the statements Bedrosian made in the
District Court proceedings are not judicial admissions, the
statement made in opening argument acknowledged the true
state of the facts. See, e.g., Glick v. White Motor Co., 458 F.2d
1287, 1291 (3d Cir. 1972) (“[A]n admission of counsel during
the course of trial is binding on his client.”); United States v.
McKeon, 738 F.2d 26, 30 (2d Cir. 1984) (“The binding effect
on a party of a clear and unambiguous admission of fact made
by his or her attorney in an opening statement was
18
acknowledged by the Supreme Court . . . and has been
frequently recognized in subsequent lower court decisions
involving civil cases.”). The concession that “there was about
2 million U.S. dollars” in the undisclosed account, Appx. at 66,
makes the IRS’s $975,789.17 penalty below the statutory
maximum (50% of the account balance). We therefore affirm
the District Court’s judgment on this alternative ground.
* * *
Arthur Bedrosian willfully filed an inaccurate FBAR.
So the Government could validly penalize him under the
penalty provisions for willful violations of the Bank Secrecy
Act. What the Government could not do, though, is penalize
him beyond the maximum statutory limits. The Government’s
evidence at trial failed to prove by a preponderance that
Bedrosian’s undisclosed bank account held $1,951,578.34.
But acknowledging at trial an account balance of at least that
much saves the need for a remand to make a finding of the
obvious. We thus affirm.
19