Bittersweet Justice for Bradley Birkenfeld

Today, the IRS awarded whistleblower Bradley Birkenfeld $104 million to reward him for having exposed UBS’ methods of helping US tax cheats hide their loot, tax free, in Switzerland.

It’s a bittersweet award, I’m sure. As Birkenfeld’s lawyer, Stephen Kohn, reminded at the ceremony, Birkenfeld was imprisoned by the Obama Administration for fraud in spite of what now is clear confirmation he acted as a whistleblower; he got out early on August 1 from his 40 month sentence.

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. Mr. Birkenfeld was the only UBS banker to blow the whistle and the only UBS banker to be prosecuted. 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.

The National Whistleblower Center carefully investigated the basis upon which the DOJ justified its prosecution. The DOJ did not tell the truth about Mr. Birkenfeld. At his sentencing hearing, the DOJ justified its decision to indict Mr. Birkenfeld based on its position that Mr. Birkenfeld had failed to inform the government about the illegal activities of his largest client, billionaire Igor Olenicoff.

But this charge against Mr. Birkenfeld was false and defamatory. The NWC carefully reviewed court records concerning the Olenicoff case, internal emails regarding Mr. Birkenfeld’s disclosures, and a confidential transcript of sworn testimony Mr. Birkenfeld provided to the U.S. Senate in 2007 about the illegal activities of Mr. Olenicoff. These materials absolutely verify that Mr. Birkenfeld did in fact blow the whistle on Mr. Olenicoff, and that the charges made by the DOJ were false. The NWC finds it very troubling that the prosecutor who leveled these charges in court against Mr. Birkenfeld has left his government job and taken a position with a major law firm that defends tax cheats. The DOJ also granted immunity to the top-ranking official at UBS who was responsible for the UBS tax frauds and permitted this official, Martin Liechti, to leave the United States and obtain safe-haven in Switzerland where, to this day, he has escaped justice. Mr. Liechti invoked the 5th amendment in testimony before the U.S. Senate.

There’s even a WikiLeaks cable suggesting we prosecuted Birkenfeld as a favor to the Swiss.

And it’s not just Birkenfeld who has gotten limited justice out of this–though obviously he is by far the worst off. While the IRS got over $5 billion in owed taxes as a result of his whistleblowing, no one else went to prison, not even the several individuals about whom specifically Birkenfeld blew the whistle. And a bunch of rich people–potentially including a Presidential candidate–enjoyed an amnesty that didn’t even require them to admit they had been cheating their country.

In short, like so much else with the Obama Administration, it’s an example where the real criminals go free while the whistleblowers get prosecuted.

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14 Responses to Bittersweet Justice for Bradley Birkenfeld

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Emptywheel Twitterverse
bmaz ESPN Is Gutless, Chris Mortenson Has Tiny Deflated Balls and Other Deflategate Trash Talk https://t.co/2hMqG1a2DR
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emptywheel RT @MikeScarcella: DOJ's new brief (to full 2nd Circuit) defending retention and subsequent search of overseized computer files https://t.c…
8mreplyretweetfavorite
emptywheel @jamescdownie But all the draft picks make it more likely something similar would have happened.
18mreplyretweetfavorite
emptywheel @jamescdownie Not sure I'd go that far. Don't think Luck would have been lured into killing himself in 1st season. Still runs as last option
18mreplyretweetfavorite
emptywheel @ColMorrisDavis AKA, how @Windows made an out of control DOJ look good by comparison...
35mreplyretweetfavorite
emptywheel @jamescdownie Thing that's so unforgivable is Snyder LIKES RGIII. That's part of what is killing him.
37mreplyretweetfavorite
emptywheel @kevinjonheller Even @steve_vladeck is more foofy let "terrorists" into courts. Should be real takeaway: couldn't FIND 5th column if existed
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emptywheel RT @chinahand: Another Shoe Drops in the Turkish “Passports for Uyghurs” Case http://t.co/ewdiJ4yJ8z shoddy TK counterfeit passports featur…
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emptywheel @sbagen @attackerman is prolly working on a secret book on "crappy Islamophobic scholarship" he's written abt it so long @charlie_savage
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emptywheel @kevinjonheller You're still pissed he left you off, aren't you?
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emptywheel @steve_vladeck Testament to his shoddy scholarship you keep writing Gitmo detainees should have access to courts & not listed @attackerman
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bmaz @mattapuzzo This somewhat Seinfeld like conversation started off with @emptywheel pointing that very juxtaposition out. #NotJustMyHead
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