A former UBS banker who went to jail after helping to uncover a tax evasion scandal at the Swiss banking giant has received a US$104 million whistleblower reward, his lawyer says.
Bradley Birkenfeld is still under home confinement after serving 36 months of his 40-month sentence. He was released from jail on August 1.
His lawyer, Stephen Kohn, executive director of the National Whistleblower Centre, told reporters about the reward, which is said to be the largest ever of its kind from the Internal Revenue Service (IRS).
“The IRS today sent 104 million messages to whistleblowers around the world – that there is now a safe and secure way to report tax fraud and that the IRS is now paying awards,” Kohn said.
He said the reward also signalled to banks that they had to “stop enabling tax cheats or you will get caught”.
In making the reward, the IRS said that Birkenfeld’s information was “exceptional in both its breadth and depth”.
Birkenfeld was an informant for US authorities investigating UBS AG, which later admitted that its employees helped American clients evade billions of dollars in taxes.
Birkenfeld admitted helping a California real estate developer hide US$200 million in assets from US authorities, thereby avoiding paying some US$7.2 million in taxes. Birkenfeld was then sentenced for his own role by a federal judge after pleading guilty.
Zurich-based UBS paid US$780 million in 2009 to avoid prosecution by the United States and agreed in the same week Birkenfeld was sentenced – also in 2009 – to hand over the names of 4450 US clients that may have evaded taxes.
But UBS took more than a year to actually hand over the data. In return, the Swiss government said Washington had dropped a key summons against the bank.
Switzerland in 2009 agreed to relax its traditional banking confidentiality rules after coming under heavy pressure from major trading partners.
Source: NEW ZEALAND HERALD