U.S. Whistleblower’s Involvement in French UBS Investigation

This past Saturday, February 20, 2016, Le Parisien/Aujourd’hui en France revealed the contents of an internal UBS memo that discussed “navigating below the radar screen” to grow its business by enticing French clients to hide their money in Swiss bank accounts. The memo indicates that “UBS was perfectly aware of the risk” of its illegal practices.

Bradley Birkenfeld, the whistleblower (“lanceur d’alerte”) who originally reported UBS to U.S. authorities, brought this memo to the attention of Le Parisien. Since 2012, UBS has been the subject of a French investigation for tax fraud and money laundering. Mr. Birkenfeld’s testimony is “at the heart of the French investigation.”

In 2007, Mr. Birkenfeld* blew the whistle on the $20 billion program run by UBS designed to recruit wealthy Americans and assist them in evading U.S. taxes. UBS ultimately had to pay the U.S. government $780 million in 2009 to avoid criminal prosecution, and turn over account information for 4,500 American clients. The Internal Revenue Service awarded Mr. Birkenfeld $104 million for reporting the tax fraud. However, the U.S. government imprisoned Mr. Birkenfeld for his involvement in the scheme. 

Le Parisien also conducted a brief interview with Mr. Birkenfeld this past weekend, in which he reiterated his willingness to meet with French Finance Minister Michel Sapin. Further, Mr. Birkenfeld expressed his hope that the mentality towards whistleblowers in Europe would change, and that whistleblowers would be respected and rewarded for doing the right thing. He advocated that awards are a matter of “public policy,” designed to help encourage whistleblowers who are intimidated, and to incentive them—if awards are available, whistleblowers know that they will be compensated if they uncover and expose fraud.

In the interview with Le Parisien, Mr. Birkenfeld was asked about Raoul Weil, who led UBS’s Wealth Management International unit but claims he was unaware of the illegal actions that occurred. Birkenfeld commented, “That’s like Santa Claus [saying] that he doesn’t know about Christmas.”

When asked what U.S. judges have done in the past few years regarding the case, Mr. Birkenfeld answered, “Nothing. They did not even call me to testify at Raoul Weil’s trial in Florida. [And yet] a month later, the French judge met with me and listened to me for ten hours.” In the U.S., Mr. Birkenfeld—without whom this fraud would have never been discovered—received jail time, while Mr. Weil was found innocent. Mr. Birkenfeld is confident in France’s justice system, “In France, today, Raoul Weil is indicted and a 200,000 Euro bond has been ordered.”

Mr. Birkenfeld hopes that his involvement in the case will help the French government bring UBS to justice, and pave the way for other European whistleblowers to report fraud.

Birkenfeld also recently informed Le Monde that there is no law that obligates UBS to verify that its clients fulfill their financial obligations in their country of residence. According to Mr. Birkenfeld, It’s the equivalent of “buying a pistol, giving it to someone and saying: I don’t know if you’re going to kill someone, but I’m giving you a pistol.”

*The National Whistleblower Center supported Mr. Birkendfeld in his efforts to expose $20 billion tax evasion scheme.