The former banker who reported his company for cheating the IRS is now out of prison — and $104 million richer.
The ex-banker from Swiss bank UBS AG, Bradley Birkenfeld is the first recipient of an IRS-issued award under the tax whistle-blower law, according to his attorneys, Stephen M. Kohn and Dean A. Zerbe, of the National Whistleblowers Center. His award? $104 million.
“The IRS sent 104 million messages to whistle-blowers around the world— that there is now a safe and secure way to report tax fraud,” the lawyers said in a statement. The IRS tax whistle-blower law has been in effect since 2006 and has awarded just three awards prior to this, but with undisclosed dollar amounts.
Birkenfield told authorities how UBS sent bankers to the US to get the attention of wealthy Americans, managed $20 billion of their assets, and helped them cheat the IRS.
The bank avoided prosecution by agreeing to pay $780 million, disclosing data on more than 250 Swiss accounts, and admitting to helping foster tax evasion. Since Birkenfeld came forward, at least 33,000 Americans have disclosed offshore accounts to the IRS, generating more than $5 billion.
As for Birkenfeld, he worked at the bank for five years and wanted a reward of as much as 30% of any taxes the agency recovered as a result of his whistle-blowing.
He was hit with a 40-month sentence in January 2010 and served it at Schuylkill Federal Correctional Institution in Minersville, PA. Good behavior led to his release on August 1 to home confinement and even the possibility of a presidential pardon, Kohn said to Accounting Today.
If that happens, then not only can whistleblowing be good for business, but it’s proof that it’s a patriotic duty as well.
Let us know what you think about Birkenfeld’s large reward. Should he receive a presidential pardon? Sound off in the comments below.