The Big Payback
Posted at 12:01 a.m. on Sept. 12, 2012
On Tuesday, the IRS awarded a $104 million whistle-blower reward to Bradley Birkenfeld, a former banker with the Swiss bank UBS.
Birkenfeld — who was released from prison in August after a two-year incarceration — provided the IRS with an unprecedented amount of information regarding the Swiss bank’s illegal offshore banking procedures.
Birkenfeld’s windfall was announced by his attorney, Dean Zerbe of Zerbe, Fingeret, Frank & Jadav. Zerbe was a former investigator and senior tax counsel to the Senate Finance Committee under then-ranking member Chuck Grassley (R-Iowa).
“[T]oday is the day we are pleased to announce that Brad Birkenfeld — the most important tax whistleblower in the history of the country — received a major award under the IRS Whistleblower program,” Zerbe said in a statement. “This award by the IRS is being made thanks to the information provided by Brad that led to over $5 billion dollars and counting in tax payments being made by big banks and wealthy individuals who tried to evade paying their fair share of taxes.”
“For [those on] the Hill, it shows the importance of oversight,” Zerbe tells HOH. Often, he says, lawmakers and staffers see the end goal at simply passing the law, not implementing it. Tuesday’s payout was a win not only for Birkenfeld, but for champions of oversight, such as his former boss, Grassley.
The Associated Press reports that in 2009, UBS entered into a “deferred prosecution agreement” requiring the bank to pay $780 million in “fines, penalties, interest and restitution” to the U.S. Treasury.
“With $5 billion dollars collected so far — the award to Brad is less than 2 cents on the dollar for every dollar collected by the Treasury,” Zerbe said. “This probably represents the greatest return on investment in the history of the federal government.”
Correction, Sept. 12:
This item incorrectly stated the amount of money that the deferred prosecution agreement required UBS to pay. That number is $780 million.