Remember Bradley Birkenfeld? He’s the guy who single-handedly made the government’s case against UBS and forced the Swiss bank to hand over the names of thousands of tax cheats, which resulted in the US scoring $780 million from UBS and may have inspired some 33,000 Americans to “voluntarily disclose offshore accounts to the IRS, generating more than $5 billion.” And yet, despite his assistance, Birkenfeld wasn’t immediately thanked for a job well done. Instead, he was sentenced to forty months in prison (fair-ish, considering he showed a few clients how to avoid paying taxes himself) and told to piss off by the Internal Revenue Service, from whom he sought an award, because he was “not forthcoming about his own role in the scheme,” even as a Justice Department attorney admitted that “…without Mr. Birkenfeld walking into the door of the Department of Justice in the summer of 2007, I doubt as of today that this massive fraud would have been discovered by the US government” (or as his lawyer put it, “They didn’t know how to spell UBS until he showed up. He didn’t just give them a piece of the puzzle. He gave them the entire puzzle”). Now, after doing 32 months at Schuylkill Federal Correctional Institution, getting let out early on account of “good-time credit,” and living in a halfway house in New Hampshire, Birkenfeld has finally been thrown a bone. Read more »
Former UBS banker Bradley Birkenfeld is the guy widely credited with helping the authorities crack down on the less than legal activities at the Swiss bank vis-a-vis clients and their taxes. For his help exposing the tax evasion specialists, he’s been rewarded with time in the big house, which is not how he’d predicted this whole thing would turn out. To the contrary, Brad and his big brain had assumed that not only would he do no time for his own wrong-doing (he had, after all, been one of those people helping clients keep some of their wealth on the hush-hush), but that he’d be looking at nice big check for a job well done signed by the Department of Justice. BUT WHY? Why did he go to the trouble of screwing the man, which involved a decent amount of effort when laying on the beach with a Thai hooker involves none? It probably had to do with the fact that he realized the man was going to screw him if he didn’t make some moves first.
On Oct. 5, 2005, high-flying American banker Bradley Birkenfeld abruptly resigned his plum position in the Geneva office of Switzerland’s premier financial institution, UBS. The sole reason, he said, was his discovery of an internal document that, in his mind, revealed a calculated plan on the bank’s part to disown him, or any one of his fellow cross-border bankers, should the music suddenly stop in UBS’ dubious $20 billion dance with America’s most wealthy. The offending document was an internal brief from UBS Legal that cataloged cross-border banking activities illegal in the United States, where Birkenfeld and the other private bankers in UBS’ wealth management division routinely made regular prospecting trips for wealthy U.S.-resident clients. The rub was that – point by point – the list of prohibitions contradicted the fundamentals of Birkenfeld’s job description: No establishing of business relationships “for securities purposes” the document read; no “solicitation of account opening” or “cold calling or prospecting;” and no contacting U.S. clients by “telephone, mail, email, advertising, the internet or personal visits.” “I’m like, ‘Holy shit, this is a stick of dynamite!’” Birkenfeld said.
Bradley Birkenfeld single-handedly made the U.S. government’s case against UBS and forced the Swiss bank to hand over the names of more than 4,000 alleged tax cheats. But he’s still going to jail.
The awesomely-named William Zloch, a federal judge in Fort Lauderdale, Fla., told Birkenfeld he’s not getting out of the 40-month sentence he got for helping UBS clients skirt their taxes. And so, barring a change of heart or judge, Bradley Birkenfeld will be reporting to some sort of federal prison on Friday, despite his patriotic and totally not self-serving assistance to his government, which is $780 million richer as a result.