The DOJ's Bad Deal with a Tax-Evading Swiss Bank - Part II
When we left off last time it was 2010. Bradley Birkenfeld, the UBS whistleblower, had been sentenced to 40 months in prison for tax evasion and the DOJ had just let UBS off the hook after the bank revealed information on a tiny fraction of the total number of accounts thought to belong to Americans hiding from the IRS. Now, for the rest of the story.
Mr. Birkenfeld, the former UBS private banker, recently got a bit (well, maybe a lot) of good news when it was announced that he would receive a whistleblower award of $104 million for his hard work. The award represents the largest individual federal payout in history and comes at an especially good time for Birkenfeld given that he was released from prison at the beginning of August, just in time to enjoy his windfall.
Birkenfeld's attorney said the man is thrilled with the development, saying that, "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 next thing on Birkenfeld's agenda is a presidential pardon which he is seeking while under home confinement as part of the terms for his release.
This likely comes as much needed vindication for Birkenfeld who said in earlier interviews that he felt he should be viewed as a hero, not a criminal. In an earlier interview with Bloomberg News, Birkenfeld said, "I delivered and documented this entire scandal, the largest in U.S. history... It's a question of doing the right thing, and that's what I did."
The IRS whistleblower program was created in 2006 to boost tax revenues by giving incentives for citizens to tipoff authorities. The program stalled for almost five years and only made its first award in 2011, despite more than a thousand tipsters coming forward. The incredibly slow pace of the program's development sparked criticism from U.S. Senator Charles Grassley who pushed for the original law. Grassley pointed out that a similar program by the DOJ had collected more than $27 billion under the False Claims Act.
Grassley released a statement saying he was thrilled with the Birkenfeld award: "This case provides evidence about how the whistle-blower program can be effective because the IRS is saying its work against this kind of tax fraud would not have been possible without the whistle-blower." Though Grassley admitted the size of the award was surprisingly large, he pointed out that billions in taxes will be collected as a result of the tip that would not have been possible without the information.
Sources:
UBS Whistle-Blower Secures $104 Million Award From IRS by Tom Schoenberg, published at Bloomberg.com, September 11, 2012.
IRS awards $104 million to UBS tax case whistleblower published at NYDailyNews.com, September 11, 2012.
See Our Related Blog Posts:
Grassley Letter to IRS Commissioner
Grassley Follow-up: Letter to Treasury Secretary Geithner and IRS Commissioner Shulman
