Lawyers for a convicted fraudster pardoned by former US President Bill Clinton failed yesterday in a bid to go to the Privy Council to stop Bermuda handing over documents to US authorities which have charged him with tax-dodging.

Almon Glenn Braswell, who was convicted of fraud in 1983 over a baldness treatment, was arrested in January this year after the Internal Revenue Service (IRS) in California alleged he hid $22.2 million between 1994 and 1997 in a Bermuda-registered company he owned.

Braswell, who is in custody in Los Angeles awaiting trial, is charged with owing $13 million in taxes and could face up to 51 years in prison if he is convicted of tax evasion, filing false returns and conspiracy.

Minister of Finance Eugene Cox has issued notices in Bermuda to have certain documents - understood to include accounts from Bank of Bermuda and Bank of N.T. Butterfield - to be handed over to the IRS.

Lawyers for Braswell and his companies Gero Vita International Inc. and GB Data Systems Inc., sought leave at the Appeal Court yesterday to go to the Privy Council in London to overturn a decision to allow the Finance Minister to hand over the documents.

Braswell's lawyer James Goudie, QC, argued authorities in the US obtained the information through a breach of client/attorney confidentiality.

It would be wrong, he argued, for the Bermuda courts to allow the information, sought under the USA-Bermuda Tax Convention Act 1986, to be given to US authorities because of the alleged breach of attorney/client confidentiality.

But David Kessaram for the Ministry of Finance said it was a matter for the US authorities, not the Bermuda courts, to decide on how the information was obtained.

Appeal Court Judges Philip Clough and Lindsay Worrell, presided over by Mr. Justice Edward Zacca, refused Braswell's lawyer's leave to take the matter to the Privy Council.

Afterwards, Mr, Goudie told The Royal Gazette that this does not mean the documents will be handed over immediately, as other matters have to be dealt with first in the Bermuda's courts.

In court, he argued: "Although the breach of professional privilege took place in the US, the proceeds of that breach are to be exploited in Bermuda by making the request to the Minister of Finance, hoping the Bermuda banks and financial institutions will hand over to the Minister that which they would not otherwise be able to hand over given their duty of confidentiality."

It was not a question of Bermudian law being applied in the US, he argued, but "whether it is proper and appropriate for the Minister of Finance to hand over to an authority that has set off a process where documents were produced through a breach of legal and professional privilege".

However, Mr. Kessaram for the Finance Ministry argued: "The alleged breach (of confidentiality) took place in the US. The rights and obligations between a US attorney and his client cannot be governed otherwise than by US law.

"It would be wrong for the Bermuda courts to try to apply Bermudian law. This being so, it is difficult to see how any fundamental freedom under our constitution can be said to have been violated.

"The US court would be much better placed to decide the issue of legal and professional privilege than we are here."

Braswell was sentenced to three years in prison in 1983 for phoney claims that he had a baldness cure. He was convicted of fraud, but was one of 177 people pardoned by Clinton shortly before he left office in 2001.

The pardon was shrouded in controversy when it was revealed that the president's brother-in-law Hugh Rodham was paid $200,000 for working on the case.

In January, Braswell was arrested and charged with tax evasion using a Bermuda company he owned, Deleon Global Trading Ltd..

According to court reports in January, prosecutors allege Braswell inflated his business expenses on raw materials for Gero Vita products by between two and ten times, using Bermuda-based Deleon Global Trading as the intermediary.

Braswell is also alleged to have used $3.5 million from a Deleon account with Bank of Bermuda to buy a house in Miami in 1997, according to the indictment.

Los Angeles accountant Robert Bruce Miller has also been charged as Braswell's corporate tax preparer, and Atlanta lawyer William E. Frantz was charged as Braswell's personal tax preparer, according to reports in January.