United States District Court, S.D. Florida
ORDER ON MOTION FOR SUMMARY JUDGMENT
BLOOM UNITED STATES DISTRICT JUDGE.
CAUSE is before the Court upon Defendant Isac
Schwarzbaum's (“Defendant” or
“Schwarzbaum”) Motion for Summary Judgment, ECF
No.  (the “Motion”). The Court has carefully
considered the Motion, all opposing and supporting
submissions, including Plaintiff the United States of
America's (“Plaintiff” or “USA”)
Response, ECF No.  and Defendant's Reply, ECF No.
, the record in this case and the applicable law, and is
otherwise fully advised. For the reasons set forth below, the
Motion is denied.
case involves an attempt by the USA to collect outstanding
civil penalties assessed against Schwarzbaum for his
allegedly willful failure to timely report his financial
interest in foreign bank accounts as required by 31 U.S.C.
§ 3514 for the years 2006-2009. See generally,
ECF No.  (“Complaint”). In the Complaint, the
USA asserts four counts seeking to reduce to judgment the
previously assessed Report of Foreign Bank and Financial
Accounts (“FBAR”) penalties for each applicable
year pursuant to 31 U.S.C. § 5321(a)(5).
1970, Congress enacted the Currency and Foreign Transactions
Reporting Act, referred to as the Bank Secrecy Act (BSA), 31
U.S.C. §§ 5311, et seq. See Pub.
L. No. 91-508, 84 Stat. 1114 (1970). The primary purpose of
the BSA is to require the making of certain reports that
“have a high degree of usefulness in criminal, tax, or
regulatory investigations or proceedings.” Id.
§ 202. To effectuate this purpose, the BSA directs the
Secretary of the Department of Treasury to promulgate
regulations requiring the reporting of information from
United States persons who have relationships, or conduct
transactions, with foreign financial agencies. See
Id. § 241(a) (codified at 31 U.S.C. § 5314).
As relevant here, the regulations require “each United
States person having a financial interest in, or signature or
other authority over, a bank, securities, or other financial
account in a foreign country” to file a FBAR.
See 31 C.F.R. § 1010.350(a). The FBAR is
required “with respect to foreign financial accounts
exceeding $10, 000 maintained during the previous calendar
year.” See 31 C.F.R. § 1010.306(c).
authority to assess and collect civil penalties for
non-compliance with FBAR requirements rests with the IRS.
See Delegation of Enforcement Authority Regarding
the Foreign Bank Account Report Requirements, 68 Fed. Reg.
26489 (May 16, 2003).
Schwarzbaum was born in Germany to parents who had resettled
from Poland. Defendant Isac Schwarzbaum's Statement of
Undisputed Material Facts, (“Def. SOMF”), ECF No.
 ¶ 1. Schwarzbaum received a high school diploma
in Germany but did not attend a university. Id.
¶ 5. As a student in Germany, Schwarzbaum did not study
U.S. law, tax law, or accounting. Id. ¶ 6. The
parties dispute Schwarzbaum's proficiency in the English
language, though English is his fourth or fifth language.
Id; United States of America's Opposing
Statement of Material Facts (“Pl. SOMF”), ECF No.
 ¶ 6. Schwarzbaum has retained German citizenship
but became a U.S. citizen in 2000. Def. SOMF ¶ 11. His
father was successful in the textile business and later in
Germany as a real estate investor. ECF No. [35-2] ¶ 6.
Schwarzbaum has supported himself and his children with his
investments and inheritance from his father, which includes
gifts he received before his father's death in 2009. Def.
SOMF ¶ 9; Pl. SOMF ¶ 9.
employed three certified public accountants
(“CPAs”) to prepare his U.S. tax returns-Brian
Gordon from 1993/94 to 2006, Doris Shaw in 2007 for tax year
2006, Steven Weitz for tax years 2008-2009 (and an individual
at Mr. Weitz's firm named Robert Silver for tax year
2007). Def. SOMF ¶¶ 21, 26, 32; ECF No. [35-1] at
71, 160; Pl. SOMF ¶¶ 34-35; ECF No. [44-1] at
14-15. However, the parties disagree as to whether
Schwarzbaum told any of the CPAs about the monetary gifts he
received from his father, or his Swiss bank accounts.
Compare Def. SOMF ¶¶ 22-23, 25, 27, 33 and
Pl. SOMF ¶¶ 22-23, 25, 27, 33. The CPA who prepared
Schwarzbaum's 2006 return completed a FBAR reporting a
foreign account in Costa Rica. Id. ¶ 29.
Schwarzbaum himself filed FBARs for tax years 2007 and 2009
for foreign accounts that had a U.S. connection. Id.
¶¶ 40-41. Schwarzbaum did not file an original 2008
FBAR; rather the 2008 FBAR was filed in 2011. Def. SOMF
¶ 41; ECF No. [35-1] at 297 ¶ 7.
October of 2009, Schwarzbaum received a letter from one his
banks in Switzerland, indicating that the Internal Revenue
Service (“IRS”) had submitted a request under
treaty to the Swiss government to obtain information about
accounts of certain individuals maintained at UBS, and that
his account appeared to fit within the scope of the request.
Def. SOMF ¶ 46; ECF No. [35-12]. The parties disagree
about Schwarzbaum's motivations following receipt of the
letter. Schwarzbaum maintains that he did not understand the
letter and sought the advice of a Swiss attorney, who told
him that the letter did not apply to him under Swiss law. The
USA maintains that Schwarzbaum actively sought to prevent
disclosure of his account information to the IRS. Def. SOMF
¶ 47; Pl. SOMF ¶ 47.
in 2011, Schwarzbaum entered into the IRS's voluntary
disclosure program, the Offshore Voluntary Disclosure
Initiative (“OVDI”). Def. SOMF ¶ 49. He and
the IRS agreed to additional income tax, interest, and
accuracy-related penalties due as a result of the failure to
report interest earned on foreign accounts, which amounts
Schwarzbaum promptly paid. Id. ¶¶ 50-51.
Schwarzbaum then opted out of OVDI and underwent full
examinations under Title 26 and Title 31. Id.
¶¶ 52-53. IRS Agent Bjork made the initial
determination that the IRS should assert a non-willful FBAR
penalty against Schwarzbaum. Id. ¶ 56; Pl. SOMF
¶ 56. Ultimately, however, willful FBAR penalties were
assessed on September 6, 2016, and the Title 26 examination
concluded with the assessment of accuracy-related penalties
for the underpayment of income tax. Def. SOMF ¶¶
60-61. The aggregate amount of FBAR penalties, plus late
payment penalties and interest is $15, 559, 072.00, and
interest continues to accrue. Id. ¶ 62; Pl.
SOMF ¶ 62.
may grant a motion for summary judgment “if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a). The parties may support their
positions by citation to the record, including, inter
alia, depositions, documents, affidavits, or
declarations. See Fed. R. Civ. P. 56(c). An issue is
genuine if “a reasonable trier of fact could return
judgment for the non-moving party.” Miccosukee
Tribe of Indians of Fla. v. United States, 516 F.3d
1235, 1243 (11th Cir. 2008) (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 247-48 (1986)). A fact is
material if it “might affect the outcome of the suit
under the governing law.” Id. (quoting
Anderson, 477 U.S. at 247-48). The court views the
facts in the light most favorable to the non-moving party and
draws all reasonable inferences in the party's favor.
Crocker v. Beatty, 886 F.3d 1132, 1134 (11th Cir.
2018). “The mere existence of a scintilla of evidence
in support of the [non-moving party's] position will be
insufficient; there must be evidence on which a jury could
reasonably find for the [non-moving party].”
Anderson, 477 U.S. at 252. The Court does not weigh
conflicting evidence. See Skop v. City of Atlanta,
Ga., 485 F.3d 1130, 1140 (11th Cir. 2007) (quoting
Carlin Comm'n, Inc. v. S. Bell Tel. & Tel.
Co., 802 F.2d 1352, 1356 (11th Cir. 1986)).
moving party shoulders the initial burden to demonstrate the
absence of a genuine issue of material fact. See Shiver
v. Chertoff, 549 F.3d 1342, 1343 (11th Cir. 2008). If a
movant satisfies this burden, “the non-moving party
‘must do more than simply show that there is some
metaphysical doubt as to the material facts.'”
Ray v. Equifax Info. Servs., L.L.C., 327 Fed.Appx.
819, 825 (11th Cir. 2009) (quoting Matsushita Elec.
Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574,
586 (1986)). Instead, “the non-moving party ‘must
make a sufficient showing on each essential element of the
case for which he has the burden of proof.'”
Id. (quoting Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986)). The non-moving party must produce
evidence, going beyond the pleadings, and by its ...