- Ex-Banker Birkenfeld Gets $104M for UBS Case Cooperation; May Be Biggest US Whistleblower Award
Ex-Banker Birkenfeld Gets $104M for UBS Case Cooperation; May Be Biggest US Whistleblower Award
Posted Sep 11, 2012 11:22 AM CDT
By Martha Neil
Sentenced to a 40-month federal prison term in 2009 for his role in a tax evasion conspiracy involving offshore American accounts, former Swiss banker Bradley Birkenfeld elicited sympathetic comments from some observers who said the hefty sentence was likely to discourage other whistleblowers from cooperating with the government.
But the former UBS AG employee's situation has recently taken a significant turn for the better. Now 47 and out of prison, he is to receive a $104 million Internal Revenue Service whistleblower award for his work in helping the feds pursue over $5 billion in unpaid taxes on unreported assets at Zurich-based UBS and other offshore banks, according to Bloomberg and the Wall Street Journal (sub. req.).
The amount may be the highest ever paid by the United States government to an individual whistleblower, Birkenfeld's lawyers say. He is represented by Stephen M. Kohn and Dean A Zerbe of the National Whistleblowers Center in Washington, D.C.
The IRS doesn't normally confirm whistleblower awards, but has done so in Birkenfeld's case because he signed a disclosure waiver, the Associated Press reports.
In a summary of the award offered by Birkenfeld's counsel, the IRS called the comprehensive information provided by Birkenfeld "exceptional in both its breadth and depth" and said it resulted in a huge case: "While the IRS was aware of tax compliance issues related to secret bank accounts in Switzerland and elsewhere, the information provided by the whistleblower formed the basis for unprecedented actions against UBS AG, with collateral impact on other enforcement activities and a continuing impact on future compliance by UBS AG."
The New York Daily News reports that attorney Andrew Carr of Bateman Gibson in Tennessee said the Birkenfeld matter has "enormous implications" for other whistleblowers and is being watched by lawyers with great interest. Carr is representing an IRS whistleblower in another tax case.
Additional and related coverage:
ABAJournal.com (2009): "Ex-UBS Banker Gets 40 Months in Swiss Bank Account Case"
ABAJournal.com (2011): "US Tax-Evasion Probe Is Eyeing Americans with Offshore Accounts Tied to Israel Banks"
ABAJournal.com (2012): "Faced with IRS Crackdown re Offshore Bank Accounts, Some Resolve Issue by Renouncing US Citizenship"