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UBS whistleblower Bradley Birkenfeld deserves statue on Wall Street, not prison sentence

SOURCE: NY Daily News

UBS whistleblower Bradley Birkenfeld deserves statue on Wall Street, not prison sentence

Juan Gonzalez - News

Wednesday, January 6th 2010, 4:00 AM

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UBS whistleblower Bradley Birkenfeld
AP
UBS whistleblower Bradley Birkenfeld

Barack Obama, who entered the White House promising all this change, should be hailing Bradley Birkenfeld as a modern-day hero.

He should erect a statue on Wall Street for this former banker for Swiss giant UBS who blew the whistle on the biggest tax-evasion scheme in U.S. history.

Instead of rewarding Birkenfeld, Obama's Justice Department is sending him to prison. He begins serving a 40-month federal sentence Friday for conspiracy and bank fraud.

What about his former bosses and fellow bankers at UBS and thousands of rich American clients who for decades stashed billions of dollars in secret UBS accounts to evade paying federal taxes?

Well, the government let them buy their way out of jail.

UBS pleaded guilty and paid a $780 million fine in February, while thousands of Americans with unreported offshore accounts have been allowed to belatedly disclose them and pay civil penalties.

Only Birkenfeld, the 44-year-old whistleblower, ends up in jail - the No. 1 example of injustice and hypocrisy in the age of Obama.

Who can forget that priceless photo of the President playing golf on Aug. 24 during his Martha's Vineyard summer vacation with Robert Wolf, president of UBS Americas?

Wolf and his employees donated $540,000 to Obama's presidential run. That made UBS the 12th largest source of his campaign funds.

Of all the people in America to choose for a golf partner, Obama chose Wolf.

The outing was only three days after Birkenfeld's harsh sentencing, and less than a week after UBS agreed to turn over the names of 4,450 of its American clients to the Justice Department. That's just a portion of 19,000 American accounts the bank has admitted keeping secret from U.S. tax officials.

So why is Birkenfeld, who gave hundreds of those names to prosecutors, going to jail?

"Without Mr. Birkenfeld ... I doubt ... this massive fraud scheme would have been discovered," Assistant U.S. Attorney Kevin Downing conceded at the Aug. 21 sentencing hearing.

Prosecutors also claimed in that hearing and in a "60 Minutes" interview Sunday night that Birkenfeld withheld information on how he had helped his biggest U.S. client, California billionaire Igor Olenicoff, hide hundreds of millions in assets. So when Birkenfeld flew here from Switzerland in early 2008, they arrested and charged him.

Birkenfeld's lawyer Stephen Kohn denies those allegations. He says the government is sending a terrible signal to future whistleblowers.

Kohn filed a formal complaint yesterday with the U.S. attorney general's office of professional responsibility, claiming the "main allegations used to secure Birkenfeld's indictment and imprisonment were not based on accurate or truthful information."

Birkenfeld offered to provide every name he knew of secret account holders at UBS, Kohn said, but he first wanted a formal subpoena because he was then a resident of Switzerland. Under Swiss law it is illegal to disclose client information.

The Justice Department refused to issue the subpoena, so Birkenfeld then went to the IRS, the Securities and Exchange Commission, and the U.S. Senate during the summer of 2007 offering the information to them.

The Senate's permanent investigations subcommittee agreed to subpoena him. He gave the committee a detailed deposition on Oct. 11, 2007 about UBS fraud scheme with lots of names, including that of Olenicoff. E-mails Kohn provided back up that claim.

Birkenfeld gave the same information to the IRS and the SEC.

Several weeks later, Olenicoff was indicted. He pleaded guilty and paid a $53 million fine.

Kohn has asked Attorney General Eric Holder for a formal investigation of the actions of Justice Department prosecutors.

Holder has his own UBS headache. Last year, the attorney general recused himself from the case because he once served as a lawyer for the Swiss bank.

The Birkenfeld case has exposed a lot more than hidden bank accounts.

jgonzalez@nydailynews.com ----------------------------

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By Deborah Sumner at 01/08/2010 - 16:18 | Accountability | Action alerts | Fiscal responsibility | login or register to post comments

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Checked with Juan Gonzales

and this is his response:

"Thank you for your note. It is not true that Mr. Birkenfeld acted only when he had already been fingered. His lawyer has supplied me, as well as the Justice Department, copies of e-mails and correspondence that show Mr. Birkenfeld began raising questions about the bank’s illegal policies back in 2005, when he was living in Switzerland and exposed to no investigation by the U.S. government. When bank officials refused to answer his questions, he resigned in 2005, and specifically cited in his resignation letter his concerns about bank policies that could be illegal under U.S. law. He then applied for whistleblower status under the bank’s own internal rules. The bank agreed to investigate his claims and noted his whistleblower status. However, by the end of 2006, Birkenfeld concluded that the internal investigation had become a whitewash. Only then did he decide to voluntarily travel to the U.S. and arrange to talk to the Justice Department. His first meeting with Justice occurred over two days in June of 2007. His client Olenicoff was not indicted until November of 2007."
By Deborah Sumner at Mon, 01/11/2010 - 11:18am | login or register to post comments

The problem, it seems, is that

Birkenfeld gave up his client as a bargaining chip AFTER he'd already been fingered for malfeasance. He did not come forward on his own and he didn't provide all the information he promised.
A person trying to save his own hide is not a whistle-blower.
By monica smith at Sat, 01/09/2010 - 10:25am | login or register to post comments

Whoops!

I'm still learning how to do this. The "Checked with Juan Gonzales" comment should have be in response to Monica Smith.
By Deborah Sumner at Mon, 01/11/2010 - 11:22am | login or register to post comments