Former UBS banker spills the beans on unethical tax evasion practices at UBS.
Bradley Birkenfeld, a former UBS banker, will take home $104 million from the Internal Revenue Service (IRS) after blowing the whistle on Swiss bank UBS. This payout marks one of the largest whistleblower rewards ever received by an individual.
Since 2007, Birkenfeld worked closely with the US government to uncover a major tax fraud case against the global financial services company that allowed high net worth clients to evade taxes, the Wall Street Journal reports.
While employed at UBS, the former banker agreed to cooperate with the US government by providing confidential information that led to successful enforcement actions by the IRS. The paper says that more than 33,000 US taxpayers have admitted to holding undeclared foreign accounts and paid up more than $5 billion in taxes and penalties.
In this case, many thought Birkenfeld would have escaped relatively unscathed. But in 2007 he admitted to smuggling diamonds into the US for wealthy clients and a year later he was slapped with a 40-month sentence and is currently finishing up his time.
Pursuant to whistleblower laws, the IRS is empowered to reward people who provide specific and credible information that can result in the agency’s collection of penalties, taxes and interest from non-compliant taxpayers. Information supplied to the agency must be based on solid evidence.
This case highlights the measures the IRS is willing to take in order to collect unpaid taxes and crackdown on fraudulent activity.
