Washington, D.C. August 1, 2012 – Today, Bradley Birkenfeld, the whistleblower who exposed UBS bank’s $20 billion illegal tax fraud scheme, was released from prison to a halfway house. Mr. Birkenfeld entered Schuylkill County Federal Correctional Institution in Minersville, Pennsylvania on January 8, 2010. He served his full term, less the mandatory good time credits afforded all federal inmates.
In a related development, the U.S. Tax Court accepted the filing of an amicus curiae “friend of the court” brief filed by the National Whistleblowers Center raising concerns about the undue delay in the issuance of IRS whistleblower rewards.
Stephen M. Kohn, Executive Director of the National Whistleblowers Center and one of Mr. Birkenfeld's attorneys stated:
Bradley Birkenfeld saved the taxpayers countless billions of dollars. To date, the information he provided the U.S. Government directly resulted in over $5 billion in recoveries for American taxpayers and are at the foundation of other investigations and indictments of Swiss financial institutions and their clients.
An investigation confirmed that the reasons given for prosecuting Mr.
Birkenfeld were not truthful. The Department of Justice falsely alleged
that they prosecuted Mr. Birkenfeld for hiding his role in serving as a
private banker for billionaire Igor Olenicoff. Testimony that Mr.
Birkenfeld gave to the U.S. Senate confirmed that he fully disclosed his
role as Olenicoff’s private banker and fully disclosed Olenicoff’s
decades-long money laundering activities before the U.S. government
filed its indictment of Olenicoff.
As a reward for doing the right thing for the American people, he sat in
prison for over two years. The architects of the illegal scheme and the
other hundreds of bankers who participated all escaped prison time. The
only banker prosecuted was the whistleblower.
Despite his unjust and retaliatory incarceration, Mr. Birkenfeld has
pledged to continue his efforts to expose illegal banking practices that
permit the wealthiest citizens to hide their money. The multi-trillion
dollar bank secrecy system provides illegal shelters for organized
criminals and facilitates terrorist financing. Mr. Birkenfeld is
committed to continue working with federal law enforcement authorities,
foreign government authorities and intelligence agencies to expose and
eradicate these illegal banking practices.
To this day the Department of Justice has not fully prosecuted tax
cheats that Bradley Birkenfeld turned over. Every case that the DOJ
fails to prosecute forces honest Americans to shoulder an incalculable
extra financial burden.
We are extremely troubled that the prosecutor, Kevin Downing, who filed
charges against Mr. Birkenfeld and recommended that the judge ‘throw the
book at him’ has left employment with the federal government to join
the private law firm of Miller and Chevalier. This firm represents
persons who willfully violate U.S. tax laws, and persons who have
illegal, undeclared offshore accounts. We intend to file a formal
complaint with the Department of Justice Office of Inspector General to
investigate Mr. Downing’s recruitment to work with this firm.
The NWC commends Mr. Birkenfeld for his commitment and the personal
sacrifices he made to call the world’s attention to the illegal banking
practices of UBS and other Swiss financial institutions. Mr.
Birkenfeld’s voluntary disclosures benefitted every honest American
taxpayer.
On July 30, 2012, the U.S. Tax Court accepted the NWC’s amicus curiae brief in a precedent-setting whistleblower tax case pending before the U.S. Tax Court. The case, Insinga v. Commissioner of Internal Revenue,
alleged that the IRS delay in ruling on whistleblower reward cases was
tantamount to a denial of claims. The NWC brief asks the Court to apply
the Administrative Procedure Act to tax whistleblower cases. This Act
permits the Court to find that the IRS has “unreasonably delayed” ruling
on whistleblower cases and to order the IRS to commence issuing rulings
on the large backlog of whistleblower cases.
Dean Zerbe, one of Mr. Birkenfeld’s attorneys said:
Like twinkies – good news came in twos today for taxpayers and
whistleblowers. The freedom of Bradley Birkenfeld, the most important
tax whistleblower in the history of the country, and the acceptance of
the NWC’s amicus brief by the Tax Court over the objection of the IRS. Tax whistleblowers should be heartened by the Tax Court's actions.
Mr. Birkenfeld’s voluntary disclosures led to:
- an agreement between the United States and UBS for the payment of $780 million in fines and penalties
- the creation of three IRS amnesty programs, under which 35,000
people have come forward and admitted to over $5 billion in illegal,
secret bank accounts
- the recovery of billions of taxpayer dollars by the IRS
- the termination of the entire $20 billion illegal UBS program that
existed to solicit and encourage wealthy Americans to hide their money
in secret, offshore accounts
- a historic treaty between Switzerland and the United States
requiring Switzerland to reveal the identity of over 4,600 tax evaders
(the richest UBS clients) for the first time
- the enactment of the Foreign Account Tax Compliance Act (FATCA)
- the IRS hiring over 350 additional employees to track down persons who hold illegal, secret offshore accounts.
Links:
Tax Court Order in Insigna v. IRS
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