Birkenfeld told authorities how UBS bankers came to the U.S. to woo rich Americans, managed $20 billion of their assets and helped them cheat the IRS. He pleaded guilty to conspiracy in 2008, a year after reporting the bank’s conduct to the Justice Department, U.S. Senate, IRS and Securities and Exchange Commission. He left prison on Aug. 1....
Birkenfeld’s disclosures preceded UBS’s decision to pay $780 million to avoid prosecution, admit it fostered tax evasion from 2000 to 2007 and turn over data on 250 Swiss accounts. UBS later agreed to provide information on another 4,450 accounts. Since then, at least 33,000 Americans have voluntarily disclosed offshore accounts to the IRS, generating more than $5 billion.
The UBS case led to an erosion of the use of Swiss bank secrecy by wealthy Americans to cheat the IRS. At least 11 banks are under criminal investigation in the U.S. Two dozen offshore bankers, lawyers and advisers, as well as 50 American taxpayers, have been charged with crimes.
“Today the IRS sent a message to every American taxpayer who still has an illegal offshore account,” Kohn said. “Turn yourself in while there is still an amnesty program. Turn yourself in before your banker does.”
...Birkenfeld, 47, spent 15 year in Swiss banking, ... was one of as many as 60 UBS bankers who crisscrossed the U.S. trolling for rich clients, even though they lacked required SEC licenses, he later told U.S. Senate investigators. They visited art shows, yachting regattas and golf and tennis tournaments, he said.
UBS trained bankers to avoid detection by regulators, urging them to carry encrypted laptop computers and falsely state on travel forms that they were entering the country for pleasure, not business, he said. The bank admitted it helped clients circumvent U.S. securities restrictions by referring them to outside advisers who set up sham companies in tax havens such as the British Virgin Islands, Hong Kong and Panama.Birkenfeld was indicted and served prison time for his role in defrauding the government. He is currently under home confinement and seeking a Presidential pardon.