Photo: Democracy Now
By Tom Schoenberg and David VoreacosSept. 11 (Bloomberg) — Bradley Birkenfeld, the former UBS AG banker who told the Internal Revenue Service how the bank helped thousands of Americans evade taxes, secured an IRS award of $104 million, an amount his lawyers said may be the largest ever for a U.S. whistle-blower.
The award is the first issued under the IRS tax whistle- blower law, according to his attorneys Stephen M. Kohn and Dean A Zerbe of the Washington-based National Whistleblowers centre.
“The IRS sent 104 million messages to whistle-blowers around the world — that there is now a safe and secure way to report tax fraud,” according to statement by the attorneys.
Birkenfeld told authorities how UBS bankers came to the U.S. to woo rich Americans, managed $20 billion of their assets, and helped them cheat the IRS. He pleaded guilty to conspiracy in 2008, a year after reporting the bank’s conduct to the Justice Department, U.S. Senate, IRS and Securities and Exchange Commission. He was released Aug. 1 from prison.
UBS avoided prosecution in the U.S. by agreeing to pay $780 million, disclosing data on more than 250 Swiss accounts, and admitting it helped foster tax evasion. It later agreed to hand over data on another 4,450 accounts. Since Birkenfeld came forward, at least 33,000 Americans have voluntarily disclosed offshore accounts to the IRS, generating more than $5 billion.
Birkenfeld worked at Zurich-based UBS, the largest Swiss bank, for five years. He sought a reward from the IRS of as much as 30 per cent of any taxes the agency recovered as a result of his whistle-blowing activities.
He began serving a 40-month sentence in January 2010 at Schuylkill Federal Correctional Institution in Minersville, Pennsylvania. He received good-time credit that reduced his term, according to his lawyers. After leaving prison, he moved to a halfway house in New Hampshire, said Kohn.
The IRS has drawn criticism for the slow pace of its whistle-blower program, taking more than four years to reward a tipster through an initiative authorised in late 2006.
The IRS said in a statement today that “the whistle-blower statute provides a valuable tool to combat tax non-compliance, and this award reflects our commitment to the law.”
The Government Accountability Office found last year that the program moved too slowly after attracting tips from more than 1,300 whistle-blowers.
–With assistance from Jeff Bliss in Washington. Editors: Fred Strasser, David E. Rovella
To contact the reporters on this story: David Voreacos in Newark, New Jersey at [email protected]; Tom Schoenberg in Washington at [email protected]
To contact the editor responsible for this story: Michael Hytha at [email protected]
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