WHISTEBLOWERS -- " If he had kept his mouth shut and his head low, Bradley Birkenfeld would be a free man today. He didn’t, so now the former UBS Swiss banker wears an electronic bracelet on his ankle and, beginning in January, will spend three years and four months in a federal penitentiary," notes columnist Ann Woolner for Bloomberg News.
He’s headed for prison even though he blew the whistle on a multibillion-dollar international tax fraud conspiracy. Birkenfeld’s information let the U.S. pierce Swiss bank secrecy laws as never before possible.
“We will be receiving an unprecedented amount of information on taxpayers who have evaded their tax obligation by hiding money offshore at UBS,” Internal Revenue Service Commissioner Doug Shulman said in a statement last week.
Because of Birkenfeld, the feds are now going after hundreds, possibly thousands, of tax evaders. They have collected a $780 million fine from UBS and forced the bank’s cooperation in finding previously secret customers.
The list of those so far charged in the scheme numbers nine, led by Raoul Weil, the former chief executive officer of global wealth management for UBS.
So why is the man who blew the whistle on a mammoth tax fraud facing prison time? The feds will tell you it’s because he played a role in the conspiracy, a fact he failed to mention when he first stepped forward.
So far he has gotten rougher treatment than those who were content to hide in the shadows. Birkenfeld’s biggest ex- customer, California billionaire Igor Olenicoff, got only probation (and only two years of that!) for hiding as much as $200 million from the IRS. He also paid the government $52 million in back taxes, interest and penalties, thanks to Birkenfeld.
Return to Switzerland
Birkenfeld’s ex-boss, who ran the global tax-fraud business, made out even better than Olenicoff. Held as a material witness for some months in 2008, Martin Liechti pleaded the Fifth Amendment when called before Congress and was allowed to return to Switzerland, a free man, charged with no crime.
Birkenfeld got slammed because, for all the good he did, he didn’t tell on himself. So prosecutors sought a 30-month prison term for him, and a federal judge in Fort Lauderdale, Florida, ratcheted it up to 40 months at sentencing last week.