Things are certainly looking brighter for former UBS banker Bradley Birkenfeld since we last wrote about him in April, when he managed to evade claims brought by real estate tycoon Igor Olenicoff. Back then Birkenfeld was in federal prison in Minersville, Penn., still serving out a 40-month sentence for his role in UBS’s efforts to help wealthy Americans bilk the Internal Revenue Service.
Birkenfeld shed his prison stripes last month and moved into home confinement in New Hampshire. We’re not sure where he’s heading when he fully regains his freedom in November, but he’ll have plenty of options: On Tuesday the IRS awarded Birkenfeld a whopping $104 million for blowing the whistle on UBS’s tax scheme.
According to Birkenfeld’s lawyers, Stephen Kohn of Kohn, Kohn & Colapinto and Dean Zerbe of Zerbe, Fingeret, Frank & Jadavof, the award is the largest whistleblower payment ever granted to an individual. The lawyers, both executives at the National Whistleblowers Center, told a press conference on Tuesday that the award highlighted the Justice Department’s folly in prosecuting Birkenfeld, who was the only UBS banker to alert the government about UBS’s scheme and the only one to be prosecuted. The bank paid $780 million for orchestrating the massive tax dodge in 2009 as part of a deferred prosecution agreement.
“The IRS reward will help undo the tremendous damage caused by the ill-conceived decision of the U.S. Department of Justice to ignore the whistleblower laws and prosecute Mr. Birkenfeld,” Kohn said in a statement. “By doing so the DOJ sent the wrong message to international bankers. They caused a chilling effect on the willingness of employees in the international banking industry with direct knowledge of illegal offshore banking practices to step forward to report these crimes.”
As reported by our affiliate, Miami’s Daily Business Review, Birkenfeld helped U.S. regulators and prosecutors unravel a $20 billion tax evasion scheme by UBS, but the Justice Department charged him with holding back details about his work for Olenicoff, who was hiding $200 million from U.S. tax authorities.
Just last week, Zerbe predicted in a Forbes blog post that “the land of milk and honey is finally in sight” for IRS whistleblowers. Zerbe cited vocal support for the IRS Whistleblower Office from U.S. Senator Charles Grassley and from IRS Deputy Commissioner Steven Miller. With Tuesday’s $104 million award, the milk has already started flowing for the most prominent IRS whistleblower of them all.
(Read more from our colleagues at the Blog of Legal Times.)
