Jailed UBS Employee Gets $104 Million From IRS For Exposing Swiss Bank Account Holders

Tyler Durden's picture




 

Just in case there wasn't enough excitement and fury directed at Swiss bank account holders, which continue to dominate the presidential election "debate" above such mundane topics as the economy, or, say, reality, here comes the IRS, which as we noted yesterday collected $192 billion less than the government spent in the month of August alone, and have awarded Bradely Birkenfeld, a former UBS employee who in 2008 pleaded guilty to conspiracy to defraud the United States and was sentenced in 2009 to 40 months in prison, but received preferential whistleblower status after a prior arrangement to expose numerous Americans with Swiss bank accounts, has just been awarded $104 million.

From Reuters:

U.S. tax authorities have awarded $104 million to a whistleblower in a major tax fraud case against Swiss bank UBS AG that widened a government crackdown on Americans avoiding taxes in Switzerland, his lawyers said on Tuesday.

 

Bradley Birkenfeld, freed last month from prison, was not present at the news conference where his attorneys announced the reward made under an Internal Revenue Service whistleblower program that has come in for some criticism in Congress.

 

Birkenfeld had sought a large payout for his role in a tax-dodging case that resulted in early 2009 in UBS entering into a deferred prosecution agreement and paying $780 million in fines, penalties, interest and restitution.

Some more on the Birkenfeld pro- then anti-tax evasion odyssey:

Banking career

 

Birkenfeld began working at Credit Suisse in 1996, followed by Barclay's Bank in 1998.

 

In October 2001, Birkenfeld began working at UBS in Geneva, Switzerland as a private banker. His principal job responsibility was to solicit wealthy Americans to invest in the bank and thus avoid paying U.S. taxes. Although UBS was not permitted to give investment advice in the U.S., the bank instructed Birkenfeld and other similar employees to lie about the purpose of their trips to the U.S. Birkenfeld advised American clients how to avoid IRS scrutiny, including placing cash and jewels in Swiss safe deposit boxes. One of Birkenfeld's wealthiest clients was a California real estate developer, Igor Olenicoff. In 2001 Olenicoff and Birkenfeld met in Geneva, the result of which was a transfer of $200 million to UBS accessible by credit cards supplied by Birkenfeld.

 

Whistleblowing and arrest

 

In 2007, Birkenfeld decided to tell the DOJ what he knew about UBS's practices. At the same time, he wanted to take advantage of a new federal whistleblower law that could pay him up to 30% of any tax revenue recouped by the IRS as a result of Birkenfeld's information. Birkenfeld also wanted immunity from prosecution for his part in UBS's transactions. In April 2007, Birkenfeld's counsel sent the DOJ a summary of the Birkenfeld's information. The DOJ responded that it was not part of the IRS's whisteleblower program and that it would not grant Birkenfeld immunity. Nonetheless, Birkenfeld met with the DOJ. When communications between Birkenfeld and the DOJ stalled, Birkenfeld contacted the Securities and Exchange Commission, the IRS, and the U.S. Senate. In April 2008, Birkenfeld's lawyers told the DOJ that he would assist the DOJ in return for immunity. One or two months later, Birkenfeld was arrested. The DOJ's top tax lawyer said, "With regard to whistleblowers: those who seek to be treated as true whistleblowers need to know they must come in early and give complete and truthful disclosures.... Mr. Birkenfeld did not come in and give complete and truthful disclosures. Therefore, he is not entitled to whistleblower status."

 

Birkenfeld's plea and sentencing

 

On June 19, 2008, Birkenfeld pleaded guilty to a single count of conspiracy to defraud the United States. On August 21, 2009, although the prosecution recommended 30 months, Birkenfeld was sentenced to 40 months in prison. He began serving his sentence on January 8, 2010. His projected release date is November 29, 2012.

Birkenfield did not appeal the conviction. On April 15, 2010, his attorneys filed a Petition for Commutation of Sentence. As of July 7, 2012, Birkenfeld is still in prison in Pennsylvania

And now, he is $104 million richer.

Implication: Uncle Sam wants you, dear concerned citizen, to expose all other such evil Swiss bank account holders (electoral campaign implications here being painfully obvious). You will be richly rewarded. But watch your back, dear concerned citizen, if you ever succeed in escaping into the rarefied air of having 2 nickels to rub together, and decide to save them not on US soil, for some inexplicable reason, but, say, Zurich or Geneva.

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Tue, 09/11/2012 - 10:56 | 2781732 Zola
Zola's picture

USSR part 2 - the snitches have a long life ahead of them.

Tue, 09/11/2012 - 10:57 | 2781739 Pladizow
Pladizow's picture

Id gladly give up 3.5yrs for $104mil.

Tue, 09/11/2012 - 10:58 | 2781745 PontifexMaximus
PontifexMaximus's picture

even 4

Tue, 09/11/2012 - 11:05 | 2781762 Pladizow
Pladizow's picture

I bet he gets out, renounces his US citizenship and is then assasinated!

Tue, 09/11/2012 - 11:06 | 2781781 Xibalba
Xibalba's picture

*heart attack(ed)* you mean? 

Tue, 09/11/2012 - 11:22 | 2781865 Dalago
Dalago's picture

Is that $104 million a taxable event?

Tue, 09/11/2012 - 11:30 | 2781877 Pladizow
Pladizow's picture

Incredibly YES!

How stupid is the IRS that they give 100 and then ask for 35 back!

Tue, 09/11/2012 - 11:48 | 2781962 SilverIsKing
SilverIsKing's picture

Stupid?

Tue, 09/11/2012 - 11:51 | 2781975 Frank N. Beans
Frank N. Beans's picture

maybe the $104 milyon was after taxes

maybe not

Tue, 09/11/2012 - 11:56 | 2782007 rayduh4life
rayduh4life's picture

Yes it is.

Tue, 09/11/2012 - 17:47 | 2783284 citizen2084
citizen2084's picture

Every event, and non-event or alleged event is taxable is usa.

Tue, 09/11/2012 - 11:39 | 2781931 Mad Max
Mad Max's picture

"heart attack" - ha.  He would do well to stay away from swimming pools, hot tubs, bathtubs, lakes, rivers, showers, water in any form, food, structures, vehicles of any kind, any element with more than 14 protons, etc. etc.  He might want to consider going native in Borneo, or deep in the upper Amazon.

Tue, 09/11/2012 - 11:58 | 2782014 rayduh4life
rayduh4life's picture

Pfftt.  He'll probably share a nice, small carribean island with Kenny Lay.

Tue, 09/11/2012 - 13:38 | 2782387 jeff montanye
jeff montanye's picture

listening to elvis strum an acoustic.

Tue, 09/11/2012 - 11:11 | 2781786 GetZeeGold
GetZeeGold's picture

 

 

Seems extreme......wonder if they have a plan for house arrest and staying alive?

 

Tue, 09/11/2012 - 11:09 | 2781801 HoofHearted
HoofHearted's picture

OK, so which one of you snitchez is going to turn in ZH membership for whatever the hell they decide we've all done? Any of you dishonor before death types? Remember the first rule of Fight Club...

Tue, 09/11/2012 - 11:13 | 2781820 GetZeeGold
GetZeeGold's picture

 

 

Hell.....I didn't figure I could count on anyone here......so I turned myself in.

 

Tue, 09/11/2012 - 11:43 | 2781946 NotApplicable
NotApplicable's picture

Wait, I thought you were just another gov. agent sock-puppet, like everybody else here?

Tue, 09/11/2012 - 12:03 | 2782038 mkhs
mkhs's picture

There are only two or three humans.  The rest is AI  algos.

Tue, 09/11/2012 - 12:58 | 2782240 Gazooks
Gazooks's picture

matrix, bitchez

Tue, 09/11/2012 - 21:35 | 2783889 StychoKiller
StychoKiller's picture

Kiss my splintery, wooden @ss!

Tue, 09/11/2012 - 11:15 | 2781830 ParkAveFlasher
ParkAveFlasher's picture

$100M is a lot of money, but it would practically only take a minute fraction of this to find and track his entire bloodline "for future usefulness".  I wonder if he's considered that the people he's exposing might not like being exposed and that these people are obviously quite resourceful.

Tue, 09/11/2012 - 11:47 | 2781958 NotApplicable
NotApplicable's picture

My perspective on this is that UBS was targeted for "assassination" as it presented unwanted competition to the criminal banking sector by offering legitimate services. I'd also guess that the list of people has been scrubbed so that only those "not in the club" (or failed to keep up with their dues) appear on it.

In other words, it was a trap.

Tue, 09/11/2012 - 12:07 | 2782054 Apocalicious
Apocalicious's picture

UBS and CS aren't part of the TBTF syndicate. I mean, if you're going to fleece American "consumers" and "investors" Uncle Scam requires that you keep said fleeced wealth firmly within our national borders. Makes for much easier eventual confiscation.

 

Consider the only US citizen tax dodgers the IRS are really going after are those that use Swiss banks with global presence. The local Swiss banks that don't have branches elsewhere, well, those have maintained client confidentiality quite nicely.

Tue, 09/11/2012 - 12:37 | 2782173 TheGardener
TheGardener's picture

When UBS was about to hit the wall, the old CEO secured new
"funding" from the US. No bailout without conditions.
Money talks.

Tue, 09/11/2012 - 14:06 | 2782472 ParkAveFlasher
ParkAveFlasher's picture

Whether or not the informant is a tool of the .001%, he is still highly mortal.  A $100M+ prize means he's likely uncovered tens of billions of dollars (if not more) in deposits that are now targeted for IRSzation.  I am perfectly sure that none of the owners of those deposits are the Sisters of Charity.  I am sure that there are more than a few unsavory characters with the wherewithall to do grave malice towards the informant.

Tue, 09/11/2012 - 15:10 | 2782740 TheGardener
TheGardener's picture

NotApp, you are not far off the mark.

How it was played out , paid in capital on equity was the
first move for full privacy destruction. Big bailout with US secured funds.
Being Swiss did not help, they were done, so new rules.

Too big to bail, as a business entity an empty shell,
the zombie is led on strings with the business model
being stripped . And this without considering SNB action...

Tue, 09/11/2012 - 10:58 | 2781746 ChubbNut
ChubbNut's picture

Oooo idk....3.5 years is a long time to be in jail...but that is a shitload of money.

Tue, 09/11/2012 - 11:54 | 2781998 Popo
Popo's picture

He'll be heartattacked in a hot tub within the year.

Tue, 09/11/2012 - 11:08 | 2781793 johnQpublic
johnQpublic's picture

depends on the prison...attica no, but a place like Butner medium where bernie madoff is, oh hell yeah

Tue, 09/11/2012 - 12:11 | 2782063 Sofa King
Sofa King's picture

Not just 3.5 years, but 3.5 years and his farts no longer make a sound. Bonus.

Tue, 09/11/2012 - 11:02 | 2781766 MillionDollarBonus_
MillionDollarBonus_'s picture

Nothing makes me angrier than knowing that there are spineless Americans out there keeping all their property for themselves. Allowing the government to redistribute your property is a form of sharing, and there is no greater virtue than sharing your property with others. 

Tue, 09/11/2012 - 11:08 | 2781790 PontifexMaximus
PontifexMaximus's picture

amen

Tue, 09/11/2012 - 11:09 | 2781802 johnQpublic
johnQpublic's picture

whats it called when you share, say, at gunpoint?

Tue, 09/11/2012 - 11:48 | 2781960 NotApplicable
NotApplicable's picture

Opportunity?

Tue, 09/11/2012 - 11:10 | 2781807 CaptainObvious
CaptainObvious's picture

This is one of your weaker efforts MDB.  Put a little more credibility into that fair-share indignation, will ya?

Tue, 09/11/2012 - 11:25 | 2781878 markovchainey
markovchainey's picture

Even the inimitable MDB has his limits...

Tue, 09/11/2012 - 11:36 | 2781918 EvlTheCat
EvlTheCat's picture

Where is your girlfriend Harry Wanger?  She hasn't been around in a while. Didi you two get divorced, and you got to troll Zero Hedge in the settlement?

Tue, 09/11/2012 - 11:36 | 2781919 Bansters-in-my-...
Bansters-in-my- feces's picture

MBD.....

Are you not dead yet...?

It's gotta happen soon......

Hurry up and die already,would ya....!

Mon, 09/24/2012 - 09:09 | 2823914 MeelionDollerBogus
MeelionDollerBogus's picture

when my property is shared with others against my consent I shall use extreme violence, an act of counter-terrorism, to stop it.

The least virtue, the most terrorism, is to take my life, my health, my property against my will. 23 voted you up. 21 voted you down including me.

Again, peak-nihilism. OR the lemmings laughing at their own executions, seeing the truth of the nonsense but not actually sticking to their guns that they must stop it.

The algo is woring. I hate you.

When actual people show up actually saying what you say to take my things I will actually kill them. It's the only choice besides suicide for it IS suicide to let people take everything I have to "share" with the undeserving. They plan to kill anyone / everyone who has their preparations for bad times (e.g retirement, savings, a garden to live off of, etc.) so that useless bottom-feeders who REFUSE to work can still be fed. They SHOULD die of starvation. That's what's good and proper for the world to live for all else is death to us all.

Tue, 09/11/2012 - 10:56 | 2781733 hedgeless_horseman
hedgeless_horseman's picture

 

 

Snitchezzz, bitchezzz!!!

Tue, 09/11/2012 - 12:02 | 2782031 Saro
Saro's picture

Snitchezzz get stichezzz, bitchezzz!

Tue, 09/11/2012 - 10:56 | 2781735 lizzy36
lizzy36's picture

Be first, be smarter or cheat.

Tue, 09/11/2012 - 11:05 | 2781778 ZaphodBeeblebrox
ZaphodBeeblebrox's picture

Naw. Be smarter and cheat and then turncoat and cheat the system.

Tue, 09/11/2012 - 10:57 | 2781737 MFLTucson
MFLTucson's picture

The moral of the story is, never trust a Jew banker.

Tue, 09/11/2012 - 10:59 | 2781747 BaBaBouy
BaBaBouy's picture

Trust your GOLD ...

Tue, 09/11/2012 - 11:14 | 2781823 Darth Sidious
Darth Sidious's picture

don't you understand that we jews control everything in a massive international conspiracy and we are monitiring this website and gathering data and information on you and all those who make posts like this.  Mossad and our even more secret and nefarious organizations will deal with all of you in due course.

Tue, 09/11/2012 - 11:22 | 2781867 Henry Hub
Henry Hub's picture

I just shit my pants!

Tue, 09/11/2012 - 12:01 | 2782020 BaBaBouy
BaBaBouy's picture

Thats why the US Military is creating a new Personal "iDrone" ...

 

Everyone is getting one assigned to them. You get Outta Line, you get "Taken Out" ==> With

Minimal Collateral Damage!

Beware... "iDrone"

Tue, 09/11/2012 - 13:36 | 2782380 AlamoJack
AlamoJack's picture

The Home Drone Bone BITCHEZZZ

Do NOT follow this link or you will be banned from the site!