Feeds: Email, RSS & Twitter

Get Our Videos By Email


8,300 Unique Visitors In The Past Day


Powered by Squarespace


Search The Archive Of 15,000 Videos




Hank Paulson Is A Criminal - Pass It On

"The Federal Reserve Is A Ponzi Scheme"

Get Our Videos By Email


Bernanke's Replacement: Happy Hour In Santa Cruz

Must See: National Debt Road Trip

"Of Course We're Not Going To  Payback the Chinese."

Dave Chappelle On White Collar Crime

Carlin: Wall Street Owns Washington

SLIDESHOW - Genius Signs From Irish IMF Protest

SLIDESHOW - Airport Security Cartoons - TSA

Most Recent Comments
Cartoons & Photos
« Collateral Transformation: More Risk For $650 Trillion Derivatives Market As Dimon Turns Water Into Wine | Main | Now We Know Which Senior MF Global Employee Told Investigators That Jon Corzine Had Direct Knowledge Of Customer Funds Being Stolen »

Jailed UBS Banker Awarded $104 Million By IRS

Brian Williams reports:

UBS tax cheat turned whistleblower gets rich in 3,2,1...



Bradley C. Birkenfeld, a former banker at UBS, recently served two and a half years in prison for tax evasion.  But Mr. Birkenfeld, 47, has a lot to show for his time and effort: The Internal Revenue Service acknowledged on Tuesday that information he had provided was so helpful that he would receive a $104 million whistle-blower award for revealing the secrets of the Swiss banking system.

By divulging the schemes that UBS used to encourage American citizens to dodge their taxes, Mr. Birkenfeld led to an investigation that has greatly diminished Switzerland’s status as a secret haven for American tax cheats and allowed the Treasury to recover billions in unpaid taxes.

In addition to paying $780 million in 2009 to avoid criminal prosecution, the bank turned over account information regarding more than 4,500 American clients.

The disclosure of Swiss banking information — which caused a fierce political debate in Switzerland before winning approval from the country’s Parliament — set off such a panic among wealthy Americans that more than 14,000 of them joined a tax amnesty program. I.R.S. officials say the amnesty program has helped recover more than $5 billion in unpaid taxes.

Mr. Birkenfeld’s award, the largest ever paid by the I.R.S., is also a milestone for the agency’s whistle-blower program, which offers informants rewards of up to 30 percent of any fines and unpaid taxes recouped by the government.

Though Mr. Birkenfeld’s $104 million award is far less than the billions he sought, its sheer size — more than $4,600 for every hour he spent in prison — could spur a surge in new whistle-blower complaints.

Mr. Birkenfeld is an unlikely crusader for tax fairness. A native of Massachusetts who studied banking at the American Graduate School of Business in Switzerland, he spent five years recruiting American clients for UBS — which managed some $20 billion in assets for Americans — before reporting the bank’s schemes to the Treasury Department. Mr. Birkenfeld also admitted in court that he once smuggled diamonds for a client in a tube of toothpaste.

He said he learned in 2005 that the bank’s advice to clients was illegal, and after reporting it to the UBS compliance office to no avail, he decided to become a government informant.

During the investigation Mr. Birkenfeld was charged with fraud for withholding crucial information from federal investigators, including details of his top client, the property developer Igor Olenicoff. Mr. Birkenfeld was sentenced to 40 months in prison, and was released early on Aug. 1.

While the program allows the I.R.S. to grant whistle-blowers as much as 30 percent of the money they recover, some federal officials urged the I.R.S. to invoke a rule that allows them to deny an award to informants who withhold information or engage in illegal activity. But Mr. Birkenfeld, whose exploits landed him on “60 Minutes” and the front pages of newspapers around the world, cut such a high profile that many lawyers worried that the I.R.S. might scare off potential whistle-blowers if he ended up empty-handed, with nothing more to show for his efforts than a criminal record.

Since the law was strengthened in 2006, it has spawned a cottage industry of whistle-blower lawyers and private investigators. They have generated hundreds of claims alleging tens of billions of dollars in tax evasion. In a few cases, hedge funds have actually invested in the cases, paying whistle-blowers cash up front in exchange for a percentage of any award they ultimately collect.

Mr. Birkenfeld’s lawyers declined to say how much of the award they would collect. But his $104 million payout is fully taxable as regular income.


Press conference:

Is this really worthy of celebration...?

"Today is a great day for tax fairness.  Today is a terrible day for big time tax cheats.  Why do I say that?  Because today is the day we're very pleased to announce that Brad Birkenfeld, the most important tax whistleblower in the history of the country, has received a major award of $104 million dollars from the IRS under the IRS whistleblower program."


PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (6)

Sep 12, 2012 at 1:52 AM | Registered CommenterDailyBail
Sep 12, 2012 at 1:52 AM | Registered CommenterDailyBail
Sep 12, 2012 at 1:53 AM | Registered CommenterDailyBail
Is the guillotine ready yet? I am ready to bring back the death penalty for those who commit treason against the American citizens. IRS is an illegal profiteering organization that crosses state, even international, boundaries. Their fraud constitutes a violation of the RICO statutes and is punishable by imprisonment and death. Their IRS access passwords should be deactivated, they should be sequestered so they can't bail,their home phones tapped, the cells and GPS' tracked, their visas should be revoked, and their assets frozen.
The Americans will get every penny they wasted on unnecessary corporate, military, and political economic global interactions; not to mention deliberately manipulating the stock market to use for rebuilding this country.
Sep 12, 2012 at 2:02 PM | Unregistered CommenterGrace
OMG Grace, You said it so well! why don't you run for some office?
Sep 12, 2012 at 9:07 PM | Unregistered CommenterDee Dee

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
All HTML will be escaped. Hyperlinks will be created for URLs automatically.