How to prosecute a lawyer who has embezzled funds

A lawyer had been indicted for embezzlement. She had carried out Ponzi schemes—that is, schemes designed to conceal her inability to repay debts—using CARPA accounts.

At the same time, she was subject to a tax audit regarding this business as well as her work as a lawyer. This ledadministration to issue a reassessment proposal a tax assessment.

The dispute was brought before the Administrative Court of Appeals, which ruled, among other things, that in the case of round-trip transactions, a taxpayer is liable for tax in a given year "only on the portion exceeding the amounts reimbursed by the taxpayer during that same year."

In the reassessment proposal by the attorney, the method used to reconstruct the profits from the embezzlement scheme resulted in the taxation of funds that the attorney had used to reimburse other victims of the embezzlement.

The Court further notes thatadministration demonstrated that the attorney embezzled more money than she returned to her victims. Thus, it has not demonstrated the existence of taxable income.

The tax assessment against the attorney is therefore set aside on this ground.

CAA Marseille, Dec. 22, 2025, No. 23MA02917

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