Whistleblower Challenges U.S. Court Ruling


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Whistleblower challenges US court ruling

By Haig Simonian in Zurich

Published: December 4 2009 02:00 | Last updated: December 4 2009 02:00

The whistleblower central to the US government’s drive to crack down on tax evasion through undeclared accounts in Switzerland has launched a challenge to have his prison sentence overturned.

Lawyers for Bradley Birkenfeld, the former UBS banker whose testimony played a major part in uncovering thousands of undeclared accounts at Switzerland’s biggest bank, say there has been a miscarriage of justice because US prosecutors made a false statement at his sentencing hearing in Florida in August.

Mr Birkenfeld is due to start a 40-month sentence next month at a federal prison after pleading guilty to conspiring to defraud the US government.

The challenge has erupted just as Mr Birkenfeld, a 44-year-old American who spent five years with UBS, presses a separate legal claim for a big “reward” from the authorities under rules introduced by the Internal Revenue Service to encourage whistleblowers.

“This is uncharted territory. It could be a gigantic fight,” said Stephen Kohn, one of two legal specialists representing Mr Birkenfeld’s compensation claim.

The IRS only started offering compensation to whistleblowers in December 2006, and no cases have come to court.

The regulations allow whistleblowers to receive a minimum 15 per cent and a maximum 30 per cent of money raised as a result of their information, including unpaid taxes, penalties and interest. The reward can also include “any related actions” and “settlements”, suggesting lawyers for Mr Birkenfeld could argue his evidence exposed not just the three US taxpayers prosecuted so far but the thousands of others whose details will be transmitted to Washington under a deal in August between the US and Swiss governments and UBS.

On the attempt to overturn the prison sentence, Mr Birkenfeld’s lawyers will appeal directly to Eric Holder, US attorney-general, by arguing that prosecutors misled the court in saying Mr Birkenfeld had not divulged information about specific UBS clients. Mr Birkenfeld’s lawyers have argued such information had been given.

The Justice Department and the IRS declined to comment.

SOURCE Financial Times

Read the full article here.



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