WHISTLEBLOWERS — Bradley C. Birkenfeld, the former UBS banker who helped break the secrecy of the Swiss banka
practice that not only sustained uncounted spy novels, but was widely
considered inviolableis facing years in prison after blowing the whistle on tax cheating via offshore accounts.
As reported by David S. Hilzenrath for the Washington Post,
Birkenfeld's tale reads like a pulp thriller, complete with the
international smuggling of diamonds stashed in a toothpaste tube.
Long-running U.S. federal probes of UBS had already driven the bank
to accept a $780 million settlement, admit that it helped Americans
hide money from the Internal Revenue Service and, under orders from a
Swiss regulator, turn over the names of 200 to 300 American depositors,
many of whom are now under criminal investigation.
Now in Switzerland, where secrecy is the bedrock of a lucrative
global banking industry, there are widespread fears that business will
never be the same. The IRS said on Wednesday that its probe of American
offshore tax dodgers will not stop with UBS.
All of that is attributable in large part to
Birkenfeld, the 44-year-old son of a Massachusetts neurosurgeon, who
approached U.S. authorities in 2007 and provided an extraordinary
inside account of the bank's conduct, according to court papers filed
Birkenfeld, who pleaded guilty to a criminal charge last year for
participating in UBS's illicit cross-border business, is scheduled to
be sentenced Friday in Florida. Although he faces a maximum of five
years in prison, the Justice Department asked the court to cut that in
half in a filing Tuesday.
The jail time could be tempered by the possibility of financial
reward. Under IRS regulations, people who blow the whistle on tax
cheaters can be eligible for rewards of up to 30 percent of any money
the IRS recoups. However, an IRS notice says the agency will refuse to
pay a reward if the whistleblower "is convicted of criminal conduct
arising from his or her role in planning and initiating" the tax