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09-08-25 UBS AG Whistle Blower Birkenfeld Imprisoned

09-08-25 UBS AG Whistle Blower Birkenfeld Imprisoned

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Published by: Human Rights Alert, NGO on Jan 18, 2011
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Human Rights Alert 
PO Box 526, La Verne, CA 91750Fax: 323.488.9697; Email: jz12345@earthlink.net
09-08-25 UBS-AG Whistle-Blower Birkenfeld Imprisoned
UBS Whistleblower Gets Rewarded With Prison Time
Commentary by Ann Woolner - August 25, 2009 21:00 EDT
UBS-AG Whistle Blower Bradley Birkenfeld
Aug. 26 (Bloomberg) -- If he had kept his mouth shut and his head low, Bradley Birkenfeld would be afree man today. He didn’t, so now the former UBS AG banker wears an electronic bracelet on his ankleand, beginning in January, will spend three years and four months in a federal penitentiary.He’s headed for prison even though he blew the whistle on a multibillion-dollar international tax fraudconspiracy. Birkenfeld’s information let the U.S. pierce Swiss bank secrecy laws as never beforepossible.“We will be receiving an unprecedented amount of information on taxpayers who have evaded their taxobligation by hiding money offshore at UBS,” Internal Revenue Service CommissionerDougShulmansaid in a statement last week.Because of Birkenfeld, the feds are now going after hundreds, possibly thousands, of tax evaders. Theyhave collected a $780 million fine from UBS and forced the bank’s cooperation in finding previouslysecret customers.The list of those so far charged in the scheme numbers nine, led byRaoul Weil, the former chief executive officer of global wealth management for UBS.So why is the man who blew the whistle on a mammoth tax fraud facing prison time? The feds will tellyou it’s because he played a role in the conspiracy, a fact he failed to mention when he first steppedforward.So far he has gotten rougher treatment than those who were content to hide in the shadows. Birkenfeld’sbiggest ex- customer, California billionaireIgor Olenicoff , got only probation (and only two years of that!) for hiding as much as $200 million from the IRS. He also paid the government $52 million in back taxes, interest and penalties, thanks to Birkenfeld.Return to SwitzerlandBirkenfeld’s ex-boss, who ran the global tax-fraud business, made out even better than Olenicoff. Heldas a material witness for some months in 2008,Martin Liechtipleaded the Fifth Amendment whencalled before Congress and was allowed to return to Switzerland, a free man, charged with no crime.
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Birkenfeld got slammed because, for all the good he did, he didn’t tell on himself. So prosecutors soughta 30-month prison term for him, and a federal judge in Fort Lauderdale, Florida, ratcheted it up to 40months at sentencing last week.U.S. District JudgeWilliam Zlochoffered no explanation why he rejected the defense plea for homedetention and bumped up even the prosecution’s recommendation for prison time. But Zloch clearlyconsiders Birkenfeld a bad guy.“You’re not going to have boy scouts in the room” when illegal activity is planned, saysDean Zerbe,special counsel to theNational Whistleblowers Center.Grand Larceny“In the pantheon of tax crimes, he’s subject to a charge of jaywalking, and he’s brought in peoplecharged with grand larceny,” Zerbe says.Home confinement and a long probation would have been plenty under the circumstances. What youdon’t want is to scare off other insiders considering blowing the whistle.If you’re looking to ferret out waste, fraud and abuse, that notorious trio of government parasites, thereis nothing like an insider.That is why Congress has for years passed laws encouraging whistleblowers by offering job protectionto government employees and a cut of any funds recovered because of their informing.The Birkenfeld sentence stands as an insult to any claim that the government wants whistleblowers tostep up. Fear of retaliation and career suicide make it hard enough to rat on your boss. Now you can addthe possibility of prison time as payment for your effort.Private BankerBirkenfeld joinedUBSas a Geneva-based private banker in 2001. Four years later he spotted an internallegal document that barred some of the very practices that UBS was using. It looked like the bank’srecruitment of wealthy Americans wanting wealth-hiding services wasn’t entirely on the level.So he notified his supervisors, to no avail. Then he formally took it to higher-ups within UBS’scompliance and legal offices.When that produced no clarification, he left the bank, only to begin receiving “threatening lettersreminding him” he could be prosecuted if he violated client confidentiality, his lawyers wrote in a courtbrief.UBS withheld a promised bonus.Birkenfeld went to the U.S. government in early 2007, with his lawyers seeking full immunity fromprosecution for him. He didn’t get it, but he told theIRSand the Justice Department what UBS had beenup to, anyway.He spent three full days talking to agents and prosecutors, giving them documents and suggestingstrategies for uncovering UBS’s gigantic tax fraud scheme.Big PictureHe gave them the big picture and the details, including the names of bankers involved and clients. Hehanded over internal documents, e-mail and presentations.“He gave them the keys to the kingdom,” Zerbe says.

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