Right about now, Bradley Birkenfeld is completing the first day of a 40-month sentence in a Pennsylvania federal prison — his reward for blowing the whistle on thousands of super-rich tax cheats who had hidden money in secret Swiss bank accounts, triggering the biggest IRS recovery ever.
The 44-year-old former UBS AG executive cooperated completely when questioned by federal authorities about customers who had billions in secret accounts, but neglected to fess up about a California millionaire he had “helped” on the side — a misstep he pleaded guilty to in June 2008.
Yet despite the fact Birkenfeld’s cooperation yielded $780 million in fines from UBS and a whole lot more from hundreds of scared tax cheats who came forward under an amnesty program to pay back taxes, federal prosecutors went after their whistleblower, seeking 30 months in jail.
Keep in mind, banks with secret accounts are Switzerland’s biggest industry, and Birkenfeld is the first Swiss banker in history to tell authorities bank secrets.
Nevertheless, a federal judge in Florida capped this absurd miscarriage of justice by sentencing Birkenfeld to 40 months.
There’s an old saying on Capitol Hill, “If you want less of something, tax it.” We suggest a corollary for Department of Justice legal eagles: “If you want to discourage people from cooperating with federal investigators, put whistleblowers behind bars on any infraction you can prove.”
Unless the public intervenes to somehow get Birkenfeld’s sentence commuted, or better, pardoned, we who pay our taxes honestly can be sure future potential whistleblowers will decide they’re better off talking only to their attorneys.
So, when millionaires and billionaires hide money from the IRS, you and we will get to carry the load they have excused themselves from, as will our children and grandchildren. No Bradley Birkenfeld is likely to come along and do the right thing.
A Birkenfeld attorney summed it up well.
Stephen M. Kohn, the Executive Director of the National Whistleblower Center and one of Mr. Birkenfeld’s attorneys issued the following statement:
“An American tragedy. A disgraceful miscarriage of justice. An insult to every honest American who must work hard and pay their taxes. The imprisonment of Bradley Birkenfeld, the most important tax whistleblower in history, is shocking and unjustified. This decision is not only grossly unfair and personally harmful to Mr. Birkenfeld, it will also have a radical chilling effect on the willingness of other bankers to step forward and expose fraud. This is devastating to any efforts to expose the use of illegal offshore bank accounts by criminals who want to avoid taxes.”
You can read the New York Daily News’ take on this in “UBS whistleblower Bradley Birkenfeld deserves statue on Wall Street, not prison sentence.”
For an excellent in-depth account, see the transcript of a “60 Minutes” segment that aired exactly one year ago, in which Birkenfeld pointed out an additional fact of his case:
(Birkenfeld) told (Steve) Kroft he shouldn’t be going to jail.
“Even though you violated the law and you were an enabler? I mean you were the person who was implementing these policies,” Kroft pointed out.
“And I’m the only one going to prison. Out of 19,000 accounts and no Swiss bankers?” Birkenfeld replied.
It doesn’t get much more ironic, unjust and counterproductive than that.
Any mob hood would get immunity, witness protection, etc. for turning in the bosses – case in point, Henry Hill, dramatized by Scorsese in Goodfellas. But this guy, who turns in thousands of cheats who are sucking the system drier than the mob ever possibly could have, deserves to go to jail because of some little dalliance? Give me a f-ing break.
Seems like the Gov is sending a message to those who might think about snitching on the rich.
Looks like Bradley Birkenfeld pissed off the wrong people.
As Bee pointed out, the person portrayed in Goodfellas got witness protection, on top of all the crimes he’d committed.
This story is just another chilling reminder (as if we needed any more of them) of how entrenched Big Business and the super-rich have become in every branch of our government. They don’t just have a stranglehold on the government; they ARE the government.
Bee, the federal prosecutor had discretion about whether to seek a fine, prison time or what have you. He needs to be reassigned or canned, IMO. The judge is another piece of work, but we’re stuck with him.
JR, that would be exactly the wrong message.
Tom, there’s no question the rich tax cheats got off scot free and shouldn’t have. There’s nothing to indicate they engineered Birkenfeld getting the shaft, though.
Let this be a warning to whistle-blowers: “DON’T DO IT.” That’s message plain and clear. The legal system should be our protector, not any more, it’s gone the way of Congress.