French 'tax evasion fighter' jailed for tax fraud

Paris (AFP) - Former French budget minister Jerome Cahuzac, whose brief in government was to crack down on tax dodgers, was sentenced to three years in prison on Thursday for tax fraud and money laundering.

A court in Paris also gave Cahuzac's ex-wife Patricia Menard a two-year prison sentence for her role in stashing millions of euros from the couple's lucrative hair transplant business in accounts abroad.

The scandal was the first of a series that tarnished Socialist President Francois Hollande's government and prompted him to order his ministers to disclose their personal wealth, breaking a taboo in France, where the assets of public officials had long been considered a private matter.

Cahuzac, a 64-year-old plastic surgeon by training, initially denied the allegations and sued the Mediapart news website that broke the story in 2012.

Footage of the minister lying to parliament was repeated in an endless loop on French TV news channels after he finally confessed in April 2013, "consumed by remorse", to having a Swiss bank account.

By the end of the trial, Cahuzac had repeatedly admitted his "inexcusable wrongdoing".

He remained motionless when the verdict was read out.

Chief judge Peimane Ghaleh-Marzban said Cahuzac, "who embodied France's tax policy", had committed an offence of "exceptional gravity".

His lawyer Jean Veil said Cahuzac would appeal, arguing that a prison term "was not a suitable punishment" for the crime.

Cahuzac said in evidence that he hid funds offshore to maintain his family's standard of living -- which included buying apartments for his children in London and Paris and paying for holidays in Mauritius.

The court also handed down a one-year suspended prison sentence and a 375,000-euro ($405,000) fine to Francois Reyl, a Swiss banker, for assisting the couple.

His bank, Reyl, was fined the maximum 1.875 million euros for money laundering. But it escaped a ban on operating in France that the prosecutor had requested.

Former lawyer Philippe Houman, who advised the couple on their financial affairs, was also fined 375,000 euros and given a one-year suspended sentence.

Prosecutor Xavier Normand-Bodard said the ruling "marks an evolution in the crackdown on tax evasion".

- Like a crime novel -

The story of the fraud, which took place between 1992 and 2013, reads like a cross between a cheap airport novel and an international financial crime manual.

In one episode, Cahuzac, using the codename "Birdie", was said to have received two cash payments of 10,000 euros on the streets of Paris.

The couple used a Royal Bank of Scotland account in the Isle of Man, an offshore financial centre in the Irish Sea, to channel cheques from English clients of their business.

As the couple's marriage began to falter, Menard also opened an account in Switzerland.

Menard's lawyer Sebastien Schapira told the trial the money was "that of fraud, but initially it was that of her work, earned day after day, hour after hour, hair by hair".

He described Menard as "naive" and an unwitting accomplice who was "swept up" in the fraud before confessing in December 2013.

She testified that the couple had become locked in a "spiral" of wrongdoing.

"I'm extremely ashamed of having done all that," she said.