crime pays

After Sending UBS Whistle-blower to Prison, IRS Gives Him $104 Million

FORT LAUDERDALE, FL - AUGUST 21: Bradley Birkenfeld (R) walks down the steps of the federal courthouse with his lawyer David E. Meier after he was sentenced to 40 months in prison by the judge on August 21, 2009 in Fort Lauderdale, Florida. Birkenfeld is a former UBS private banker who was a key informant for the U.S. government in tax evasion case against the Swiss bank, who was helping wealthy Americans dodge income taxes through secret accounts. (Photo by Joe Raedle/Getty Images) *** Local Caption *** Bradley Birkenfeld;David Meier
Birkenfeld on the day he was sentenced to 40 months in prison. Photo: Joe Raedle/2009 Getty Images

In 2007, former UBS banker Bradley Birkenfeld filled in the IRS on schemes the bank used to help its American clients avoid paying taxes, leading to a massive crackdown on Swiss tax havens. The bank paid $780 million to avoid prosecution, and the IRS recovered $5 billion through an amnesty program set up for wealthy tax cheats. The New York Times reports that to show their appreciation, the IRS is giving Birkenfeld $104 million, the largest sum ever awarded through an agency program offering whistle-blowers a percentage of the money it recovers. The move is meant to encourage others to come forward, though the two and a half years Birkenfeld spent in prison after he was charged with fraud for withholding information may give potential whistle-blowers pause.

IRS Gives UBS Whistle-blower $104 Million