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UBS AG Bank Whistleblower Wins $104M Reward from IRS
A former UBS AG banker who is under home confinement for helping a wealthy client evade U.S. tax collectors will get a $104 million whistleblower reward from the Internal Revenue Service.
Bradley Birkenfeld will receive the payment for details he provided the U.S. government about offshore banking activities of the Swiss bank, the IRS confirmed, after his lawyers in Washington on Tuesday announced the reward. Birkenfeld was released from prison last month after serving more than two years on one count of conspiracy to defraud the United States.
Dean Zerbe of Zerbe, Fingeret, Frank & Jadav, one of Birkenfeld's lawyers, said the reward represents "a great day for whistleblowers." Zerbe is representing Birkenfeld with Stephen Kohn and David Colapinto of Kohn, Kohn & Colapinto. Kohn, Colapinto and Zerbe also are staffers at the National WhistleblowersCenter, a nonprofit organization that advocates for workers who disclose fraud, waste, and abuse.
"Today is a great day for tax fairness," Zerbe said at a news conference. "Today is a terrible day for big-time tax cheats."
An IRS report released by Birkenfeld's lawyers said the information the former banker provided to the U.S. government was "exceptional in both its breadth and depth, "forming the basis of actions against UBS. As part of a 2009 deferred prosecution agreement between the U.S. Justice Department and UBS, the Swiss bank agreed to pay a $780 million fine. Birkenfeld's disclosures also led to the collection of more than $5 billion in back taxes, penalties, and fines, as well as the names of more than 4,900 U.S. taxpayers who held offshore UBS accounts, according to the National Whistleblowers Center.
Birkenfeld received the reward under the IRS whistleblower program, which gives informants a percentage of money the U.S. government recovers after fraud is found.
"The IRS believes that the whistleblower statute provides a valuable tool to combat tax noncompliance, and this award reflects our commitment to the law," IRS spokeswoman Michelle Eldridge said in a written statement.
This article originally appeared as a post on The BLT: The Blog of LegalTimes.
See also: "SEC Hands Out First Whistleblower Payment, Hints at More To Come," CorpCounsel, August 2012.