Whistleblower Protection Blog : Whistleblower Lawyer & Attorney : National Whistleblower Legal Defense and Education Fund : Whistleblower Protection, Fraud Claims : Washington DC

The agreement with UBS was only for a small portion of the names of tax cheats and the fine was a drop in the bucket compared to the entire $20 billion dollar illegal program.  In order to overcome the damage done by the Department of Justice's prosecution of the whistleblower, Bradley Birkenfeld, the IRS and President Obama should follow the intent of the law and issue Mr. Birkenfeld his reward and immediately commute his prison sentence."

I am worried that the Internal Revenue Service ("IRS") is doing next to nothing to identify tax evasion by U.S. taxpayers utilizing these accounts while waiting for ratification of the treaty.

It seems this information [provided by Mr. Birkenfeld] would allow the IRS to trace individuals in the U.S. that had UBS bank accounts…  Using this information to identify U.S. clients would appear to be more productive than simply pursuing agreements and treaties with the Swiss, especially since those avenues seem limited to specific individuals. 

Today's vote in Switzerland only underscores the need for the IRS to encourage whistleblowers to come forward.  Mr. Birkenfeld blew the whistle on just one bank. What is the IRS doing to encourage more whistleblowers to come forward about offshore bank accounts?

As we have written before, the U.S. Justice Department admitted in court proceedings that "but for Mr. Birkenfeld" the illegal $20 billion tax evasion "scheme" by the Swiss banking giant UBS "would not have been discovered by the U.S. government."  Despite his historic contribution toward enforcement of tax laws, Mr. Birkenfeld remains the only banker prosecuted and incarcerated by the U.S. government.

The U.S. Senate estimates that $5-7 trillion in tax revenue is lost in undeclared offshore bank accounts. There must be consistent policies regarding the treatment and encouragement of whistleblowers throughout the U.S. government. It is our hope that Senator Grassley’s letter will encourage a full evaluation of how Mr. Birkenfeld’s information was used (or misused), the prosecution of the high-level UBS officials who initiated and planned the $20 billion tax evasion scheme, and justice for all honest American taxpayers.

It remains imperative that those who support whistleblowers, accountability and transparency continue to send letters in support of Mr. Birkenfeld’s clemency campaign. His prison sentence continues to have a chilling effect on all international bankers who posses similar information.

Click here to read the full article.

As you know, Mr. Birkenfeld filed his official clemency petition on tax day. If you have not done so already, we urge you to take action now and send a letter in support of Mr. Birkenfeld's clemency campaign. We also urge you to pass this message on to your friends, family, and anyone else who might be interested in this cause. 

*Meryl Grenadier (NWC Fellow) drafted this post.

In the appeal to President Obama, Mr. Birkenfeld’s attorneys, Stephen M. Kohn, Executive Director of the National Whistleblowers Center and Dean Zerbe former counsel to the Senate Finance Committee, wrote:

“There has never been such an important tax whistleblower in U.S. history. There has never been one courageous individual who, standing along and confronting (at the time) the largest bank in the world, made disclosures that resulted in the recovery for the U.S. taxpayers of billions of dollars.”

Despite the Department of Justice admission that “but for Mr. Birkenfeld” the illegal UBS scheme “would have gone undetected by the U.S. government,” Bradley Birkenfeld was prosecuted and sentenced to 40-months in federal prison, which he is currently serving. Mr. Birkenfeld’s attorneys pointed out the chilling effect this lengthy prison sentence will have on corporate whistleblowers, specifically those in the international banking industry.

The NWC is urging all members of the public to participate in Bradley Birkenfeld’s clemency campaign by sending letters of support to President Obama and the Pardon Attorney. To submit a letter, please click here.

The attorneys wrote:

Mr. Birkenfeld's whistleblowing put a big dent in these secret offshore accounts, but there is lots more out there. It took an insider to blow the whistle the first time and it is going to take another insider to do it again as account holders, especially the most flagrant tax evaders, are now moving monies to banks with even greater secrecy. When the government cannot stop offshore tax evasion, it is the honest American taxpayer who has to foot the bill.

The Forbes piece appeared the day before April 15, the deadline for Americans to file their taxes.  Mr. Birkenfeld filed his official petition for clemency today, and the National Whistleblowers Center has launched an international letter writing campaign on behalf of Mr. Birkenfeld. To write a letter, click here.

Mr. Kohn and Mr. Zerbe also submitted a direct appeal to President Obama, requesting that he pardon Mr. Birkenfeld on Tax Day as a symbol of support for the American taxpayers. According to Birkenfeld’s attorneys: 

Mr. Birkenfeld has served enough time. Today is the day for President Obama to use his pardon power to ensure that ‘justice’ does not come at the cost of what is in the best interest of the American taxpayers.

*Philip Barrett (NWC Intern) & Meryl Grenadier (NWC Fellow) contributed to this post

Mr. Birkenfeld is the most important tax whistleblower in U.S. history, and is credited with being the first international banker to shatter Switzerland's historic bank secrecy laws.  His allegations have directly resulted in billions of dollars in savings to the U.S. taxpayers.  Before his imprisonment,  Mr. Birkenfeld's case was highlighted on 60 minutes , and he was named Tax Notes "Person of the Year. "

During his sentencing proceeding, the Department of Justice admitted that "but for Mr. Birkenfeld" the illegal $20 billion tax evasion "scheme" by the Swiss banking giant UBS "would not have been discovered by the U.S. government." As a result of Mr. Birkenfeld's unprecedented and voluntary disclosures, the U.S. government stands to recover an estimated $3 to $5 billion in immediate tax recoveries.  Additionally, UBS was forced to agree to pay a $780 million fine to the United States and the IRS created an amnesty program under which 14,700 Americans came forward to report illegal offshore bank accounts.

 Mr. Birkenfeld stated the following in his petition for commutation:

"[Birkenfeld] made every effort to come to the United States on numerous occasions, at his own expense and risk to his life, to meet with the DOJ, IRS, SEC and U.S. Senate prior to his indictment by the DOJ.  He also came forth with hundreds of internal documents recording the illegal actions of UBS and U.S. taxpayers and testified about his involvement with Mr. Olenicoff before Olenicoff was indicted and was sentenced.  As the Justice Department rightfully stated in formal court filings:  'Birkenfeld has provided substantial assistance in the investigation and prosecution of others who have committed offenses.  This substantial assistance has been timely, significant, useful, truthful, complete and reliable.'"  Attachment 11, Motion for Sentence Reduction filed by the U.S. Department of Justice, U.S. District Court for the Southern District of Florida (No. 08-60099)(docketed August 18, 2009), page 4.  DOJ filing linked here.

Stephen Kohn, Executive Director of the National Whistleblowers Center and attorney for Mr. Birkenfeld said, "On Tax Day, it is absolutely critical that President Obama send a message that whistleblowers are welcome in the United States. He can send this message by exercising his constitutional authority and granting Bradley Birkenfeld his freedom."

In support of the clemency petition, the National Whistleblowers Center is organizing a worldwide letter writing campaign.  A copy of this international appeal letter is linked here .

The official clemency petition will be filed with the President of the United States and the Office of the Pardon Attorney on April 15, and will be made available online.

Please contact Lindsey Williams at 202-342-1903 or lmw@whistleblowers.org to arrange an interview with Mr. Birkenfeld's attorneys, Dean Zerbe or Stephen M. Kohn.

Links:

Department of Justice Motion to Reduce Sentence

NWC International Appeal

Photo of Bradley Birkenfeld, courtesy of the National Whistleblowers Center

***

“Inside the Cartel” takes a look into the depths of the Swiss banking industry, explaining the history that led to the development of its notorious secretive practices and culture. Mr. Birkenfeld writes about his time at UBS, where he uncovered a multi-billion dollar tax evasion scheme and exposed it to the U.S. government. Although his disclosures were unprecedented, Mr. Birkenfeld was indicted and ultimately sentenced to 40 months in federal prison.

Mr. Birkenfeld wrote:

Future financial whistleblowers deserve infinitely better treatment than I received. They deserve to be praised and protected, not prosecuted. And truth-tellers should not have to choose their conscience over their career and especially over their very freedom.

Mr. Birkenfeld explained how the U.S. Deparment of Justice treatment of whistleblowers has implications far beyond his “personal situation.”

The American taxpayers are not the only ones disadvantaged as a result of this illegal scheme. This corruption and secrecy takes money from many government endeavors that are used to fund humanitarian projects and aid developing countries.

Take Action to support clemency for Bradley Birkenfeld.

“Inside the Cartel” by Bradley Birkenfeld

* Philip Barrett (NWC intern) and Meryl Grenadier (NWC Fellow) contributed to this post.