Whistleblower Receives $104 Million from IRS for Exposing UBS
by Terri Eyden on
By Christina Camara
In what is considered the largest whistleblower award issued to a single individual, the IRS has given $104 million to the man who exposed a massive tax fraud by Swiss bank UBS.
The whistleblower, Bradley Birkenfeld, 47, helped authorities uncover his employer's role in helping thousands of wealthy Americans evade taxes by hiding billions of dollars in secret Swiss accounts. He confessed to helping rich clients buy art and jewels, and even sneaking diamonds into the United States in a toothpaste tube. He also told of bankers using encrypted laptops and erasing references to US banking clients.
However, Birkenfeld withheld other information about conspiring with a wealthy California developer to evade taxes, and he spent thirty months in prison, Reuters reported. According to The New York Times, he realized about $46,000 for every hour he spent in prison.
He was released from prison last month and is living in New Hampshire under home confinement on a friend's estate. Tax lawyers, who were not connected to the case, estimate he will net about $44 million after paying taxes and legal fees. Birkenfeld's home confinement is scheduled to end in late November.
His lawyers said Birkenfeld is continuing to work with tax authorities on their investigations, which led UBS to pay a $780 million settlement. In addition, the bank handed over account information on more than 4,500 American clients.
The New York Times reported that the disclosure caused such a panic that 14,000 wealthy Americans took advantage of a tax amnesty program. The information provided by Birkenfeld brought in $5 billion in taxes from "big banks and wealthy individuals who tried to evade paying their fair share," Birkenfeld's lawyer, Dean Zerbe said.
Zerbe told The Wall Street Journal that corrections officials would not let Birkenfeld comment on the award, and that his client has asked for a presidential pardon.
The whistleblower program offers rewards of up to 30 percent of any fines and unpaid taxes recovered by the government, and this record-breaking payout could prompt more revelations.
Michael A. Sullivan, a partner at Finch McCranie of Atlanta, cheered the agency's decision. "It heartens those who deal with whistleblowers daily to see the IRS simply follow the law and reward a whistleblower who meets the law's requirements," he told The New York Times.
Solomon Wisenberg, a partner at law firm Barnes & Thornburg, told Reuters that some may argue that it is an "outrage" for a whistleblower to receive such a large award. "But if ever there was anyone who deserved a big reward it was this guy," he said. "He's done something no one's ever done before, essentially brought the Swiss banks to their knees."
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1 week 3 days ago by claudilocks