(born February 26, 1965) is an American private banker,convicted felon, andwhistleblower. During the mid- to late-2000s, he made a series of disclosures aboutUBS Group AGclients, in violation ofSwiss banking secrecylaws, to the U.S. government alleging possibletax evasion.Known as the 2007Birkenfeld Disclosure, theU.S. Department of Justice(DOJ) announced it had reached adeferred prosecution agreementwith UBS that resulted in aUS$780 million fine and the release of previously privileged information on American tax evaders.
In theUnited States, he was convicted by the DOJ for a single charge offraud conspiracyand served 40 months in afederal penitentiaryfrom 2010 to 2012 with a fine of $30,000. After he applied forwhistleblower statusand protection, theInternal Revenue Service(IRS) awarded him a settlement of $104 million through theirWhistleblower Office.5InSwitzerland, he is considered a criminal and is subject to arrest if he returns to the country for breakingbankclient confidentialitylaws, a federal crime.6
Birkenfeld was born on February 26, 1965, inBrookline, Massachusetts, a suburb of Boston.78His father was a neurosurgeon. Birkenfeld attendedThayer Academy, a prep school, and graduated fromNorwich Universityin Vermont in 1988.9Birkenfeld is Jewish, his paternal grandfather, Max, emigrated to the United States from Romania in 1922. He obtained a masters degree at theAmerican Graduate School of BusinessinLa Tour-de-Peilz, Switzerland.7
Birkenfeld began his career in banking in thecurrency tradingdepartment ofState Street Bank & Trustin Boston. Birkenfeld claims that he first blew the whistle on illegal activities while at State Street, approaching theFederal Bureau of Investigation(FBI) in 1994. The information did not lead to any indictments.9He says that he turned down an offer to join the FBI after the incident, but that claim has been disputed.10In 1996, he was hired as aprivate bankeratCredit Suissebefore moving on toBarclays Bankin 1998.7In October 2001, Birkenfeld began working atUBSinGeneva, Switzerland, again as a private banker offeringwealth managementservices.11His principal job responsibility was to solicit wealthy Americans to move their assets to the bank, enabling them to hide their funds due to Switzerlands strict banking secrecy laws and thus avoid paying U.S. taxes.12According to Birkenfeld, UBS sponsored events like art shows and yacht races in the United States to attract wealthy people as potential clients.13
Birkenfeld worked at Swiss investment bankUBSfrom 2001 to 2005 as a private banker.
Main articles:UBS tax evasion controversies Birkenfeld Disclosure: 2007, andUBS Tax evasion
After learning aboutUBS Switzerland AGdealings in the U.S., Birkenfeld resigned on October 5, 2005 and became a partner at Union Charter Ltd., where he specialized in wealth management.14In 2007, he disclosed to the U.S.Department of Justice(DOJ) what he knew about UBSs illegal practices attempting to take advantage theTax Relief and Health Care Act of 2006, a law that could pay him up to 30% of any tax revenue recouped by the IRS.15However, because he did not provide full and complete information to U.S. authorities, Birkenfeld was arrested in Boston on 7 May 2008 when he deplaned from Switzerland arraigned at the U.S. District Court, Southern District of Florida on 13 May.16Birkenfeld resigned his position with Union Charter on 3 June 2008 after agreeing to plead guilty to not disclosing accurate information. As a private banker, Birkenfeld advised California real estate developerIgor Olenicoff, to evade U.S. taxes worth approximatelyUS$200 million.11Olenicoff subsequently pleaded guilty totax evasionand paid a $52 million fine, but avoided a jail sentence.17U.S. District JudgeWilliam Zlochcharged him with a single count ofconspiracy to defraud the United Statesand sentenced Birkenfeld to 40 months in prison and a $30,000 fine.18Birkenfeld served his time at theSchuylkill County Federal Correctional Institutionfrom January 2010 to August 2012.19In 2012, as a consequence of his whistleblower status, the ternal Revenue Service(IRS) awarded him $104 million, 26% of the total $400 million in taxes returned.520
Birkenfeld is viewed as a criminal and atraitorby some members of the Swiss public andbanking communityas he broke the countrysbanking secrecylaws.6Although he left Switzerland before he disclosed banking client information, had he remained a resident, he would have been prosecuted byZrichauthorities for three and a half years in prison and commensurate fines.6When asked if he would ever return to Switzerland, Birkenfeld stated: I dont believe I will.21UBS announced that it would cease providing cross-border private banking services to U.S.-domiciled clients through its non-U.S. regulated units as of July 2008.22
After Birkenfelds award, the Swiss newspaperBlickclaimed, Birkenfeld was a blessing for the Swiss financial industry, in that his revelations helped accelerate the industrys transition away from its reliance ondirty moneyby dooming the bank secrecy laws that enabled tax evasion.
Birkenfeld has compared the Swiss banking industry withgangsters. In essence, bank secrecy is analogous to criminal racketeering and the Swiss government, along with every Swiss private banker, is a co-conspirator.
Brad Birkenfelds three-year period ofparoleran through November 2015; a year previous Birkenfelds attorney petitioned the U.S. District Court to allow Birkenfeld to travel abroad.23While on parole, Birkenfeld engaged with a variety of charitable efforts: he allowed disadvantaged children to use his luxury suite atBoston Bruinshockey games and donated six electric bicycles to theBoston Police Departmentafter theBoston Marathon bombings.23
In January 2015, Birkenfeld wassubpoenaedby a French magistrate investigating the abetting oftax evasionandtax fraudby French citizens at UBS.24In February 2015, he was allowed to travel to France from 27 February to 1 March 2015 to appear before the French court.25The French court is investigating allegations that UBS marketed Swissnumbered bank accountsto French citizens to allow them to hide their assets.26
Browning, Lynnley (10 November 2008).Indictments Said to Be Possible in UBS Inquiry.
Hilzenrath, David S. (10 November 2008).U.S. Given A Look at Swiss Bank Accounts.
Baxter, Brian.UBS to Pay $780 Million Fine in Tax Case Settlement. American Lawyer
UBS Enters into Deferred Prosecution Agreement: Bank Admits to Helping U.S. Taxpayers Hide Accounts from IRS; Agrees to Identify Customers & Pay $780 Million. U.S. Department of Justice
Laura Saunders and Robin Sidel (September 11, 2012).Whistleblower Gets $104 Million. The Wall Street Journal.
Gonzalez, Juan.UBS whistleblower Bradley Birkenfeld deserves statue on Wall Street, not prison sentence. New York: N.Y. Daily News
Hilzenrath, David S. (May 16, 2010).Swiss Banker Turned Whistleblower Ended Up With a Prison Sentence.
Voreacos, er Who Blew Whistle Over Tax Cheats Seeks Pardon. Bloomberg
Voreacos, David.Banker Who Blew Whistle Over Tax Cheats Seeks Pardon. Bloomberg News
Pfeifer, Stuart (October 26, 2009).He put a dent in tax evasion.
Stier, Ken (6 October 2009).Why Is the UBS Whistle-Blower Headed to Prison?. Time Magazine
Hilzenrath, David S. (16 May 2010).Swiss banker turned whistleblower ended up with a prison sentence. Washington Post
Carlyn, Kolker and David Voreacos (19 June 2008).Ex-UBS Banker Birkenfeld Pleads Guilty in Tax Case (Update3). Bloomberg
Roland, Neil (March 3, 2009).Justice Dept. chastises UBS chairman over IRS fraud probe.
Stier, Ken (October 6, 2009).Why is the UBS Whistle-Blower Headed to Prison?.
Voreacos, David (January 6, 2010).Ex-UBS Banker, Informant Birkenfeld Seeks Probe of Prosecutors.
, Aug. 21, 2009. The judge socked it to Birkenfeld ….. Retrieved 2012-09-12.
Sanders, Laura.UBS Whistleblower Released From Prison. Wall St. Journal. Archived fromthe originalon 2016-03-11
Ramonas, Andrew (September 11, 2012).Swiss Bank Whistleblower Wins $104M Reward from IRS. The Blog of the Legal Times
Kroft, Steve (August 15, 2010). Banking: A Crack In the Swiss Vault.
Statement on Indictment of UBS ExecutiveBusinessWire
Javers, Eamon.Why this Swiss bank whistleblower cant leave US. CNBC
Letzing, John.UBS Whistleblower to Assist French Investigation Into Swiss Bank; Bradley Birkenfeld Summoned to Appear Before Judge in Paris. Wall Street Journal
Voreacos, David.UBS Whistle-Blower Birkenfeld Allowed to Testify in France. Bloomberg
Lettzing, John.Whistleblower Adds to UBSs Tax Woes in France. Wall Street Journal
Wikipedia articles with WorldCat-VIAF identifiers
This page was last edited on 3 March 2019, at 14:16