The key whistleblower in the U.S. government's case against Swiss banking giant UBS's offshore banking practices is asking that his 40-month prison sentence be postponed and reconsidered.
The motion Bradley Birkenfeld filed over the weekend in U.S. District Court in Fort Lauderdale, Fla., would, if granted, push back the Jan. 8 date on which he is to report to prison and reduce his sentence -- which includes a $30,000 fine.
This Swiss news segment (in French) about UBS whistleblower Bradley Birkenfeld features and interview with GAP Homeland Security Director Jesselyn Radack.
Whistle-blower advocates are asking U.S. Attorney General Eric Holder to review the treatment of tipster Bradley C. Birkenfeld, the former UBS banker who was sentenced to 40 months in prison despite his pivotal help in the groundbreaking case against the Swiss banking giant.
This post was written by GAP Homeland Security Director Jesselyn Radack for her Daily Kos Blog.
Today's Washington Post has an article on exactly what I got slammed for writing yesterday; namely, that the UBS-Swiss settlement was no "bargain." For those of you who say I need to get my facts straight, maybe you'll believe the MSM Post. http://www.washingtonpost.com/...
Annually, the treasury loses over $100 billion in revenue due to illegal offshore tax havens. UBS, Switzerland's largest bank, admitted that for years it helped thousands of American clients hide billions of dollars from the IRS.
Yesterday, the IRS revealed the criteria for the lame settlement of a civil lawsuit in which the U.S. sought the names of 52,000 UBS tax cheats.
The tortured wording and the many limitations in this annex [to the settlement agreement] shows the Swiss government trying to preserve as much bank secrecy as it can for the future, while pushing to conceal the names of tens of thousands of suspected U.S. tax cheats. . . It is disappointing that the government went along.
Incompetence #1: The U.S. sought the names of 52,000 tax dodgers and settled for 4,500--fewer than 10%
Incompentence #2: They knew back in June 2007, courtesy of whistleblower Brad Birkenfeld, that there were 19,000 undisclosed accounts.
Incompetence #3: If your Swiss bank account was under $1 million, you're off the hook.
Incompetence # 4: If you voluntarily disclosed your Swiss bank account under the IRS "Amnesty" (the IRS's words, not mine) Program, then you will not face criminal liability.
Incompetence #5: The government underfined the bank.
Incompetence # 6: The government indicts people like Raoul Weil in show maneuvers, knowing he won't be extradited.
Incompetence #7: The U.S. had UBS kingpin Martin LIEchti in its claws back in April 2008 and released him back to Switzerland, scot-free.
Incompetence #8: The whistleblower, Brad Birkenfeld, who in the words of prosecutor Kevin Downing, we would have had no other means to have learned what was going on but for an insider in that scheme providing detailed information, which Mr. Birkenfeld did, is the ONLY one going to jail in this whole scandal.
This post was written by GAP Homeland Security Director Jesselyn Radack for her Daily Kos Blog.
It's gone from bad to worse. I've written previously about how Brad Birkenfeld, the whistleblower who shattered 75 years of Swiss bank secrecy, is the only one going to jail in this multi-billion dollar scandal. But now my dyspepsia has turned to projectile vomiting. I have asked in previous diaries why, when the U.S. had UBS kingpin Martin Liechti in its claws, it set him scot-free back to Switzerland.
Well, we now know why. Consistent with a disturbing trend, the United States granted the worse of the worst immunity, and is imprisoning not just a bit player, but the whistleblower... and an American.
If you don't know about financial whistleblower Brad Birkenfeld already, then I recommend you watch this:
In Le Temps today, Switzerland's leading daily newspaper, http://www.bilan.ch/... it states that Martin Liechti received immunity. I know it is in French, but the relevant part translates as follows:
Despite incriminating documents pointing to LEICHTI, he was granted immunity.
But the U.S. would have had nothing on Liechti (as evidenced by the fact that it searched his place some five years ago and couldn't make a case), but for Brad Birkenfeld, who blew the whistle on Liechti and other top UBS executives.
So, it is especially shocking to find that the U.S. granted immunity to Liechti, the mastermind, when it wouldn't grant immunity to Birkenfeld, and actually prosecuted him!
There is no justice. What can you do? Watch the YouTube video, rate it, and post a comment. Spread this wretched story.
Without expatriate whistleblower Bradley Birkenfeld, offshore tax havens for Americans might still be a great way to hide money from the IRS. For his help in uncovering an international network of hidden money, the former UBS banker received a 40-month federal prison sentence.
Three Washington, D.C.-based government watchdog groups say the sentence imposed by U.S. District Judge William Zloch in Fort Lauderdale, Fla., will discourage other bankers from coming forward to the Internal Revenue Service under a three-year-old whistle-blower law.
This post was written by GAP Homeland Security Director Jesselyn Radack for her Daily Kos Blog.
This morning, whistleblower advocacy groups called for Attorney General Holder to personally consider whether DOJ should be locking up whistleblower Brad Birkenfeld. Birkenfeld took immense professional and personal risks to voluntarily disclose UBS's multi-billion dollar tax fraud conspiracy to law enforcement officials, handing DOJ its case against UBS on a silver platter.
What was Birkenfeld's reward for blowing the whistle? He is facing jail time while his colleagues who did nothing to cooperate have gotten off practically scot-free. Holder should review this case and protect Birkenfeld, lest Holder plans to give up on any possible future financial whistleblowers who will learn that a "whistleblower reward" is a prison jumpsuit.
Today's letter from the National Whistleblower Center (NWC), the Government Accountability Project (GAP) and the Project on Government Oversight (POGO) points out the tragic consequences of DOJ punishing rather than protecting financial whistleblowers and should spur Holder to personally review Birkenfeld's case.
With $5-7 trillion U.S. dollars hidden in offshore accounts causing $100 billion in treasury revenue losses, the harm in sending Birkenfeld to jail is astronomical. Holder ought to pay attention when he reads the consequences the letter points out:
Denying Mr. Birkenfeld whistleblower status, and sending him off to a long prison term, radically undermines the ability of the U.S. government to detect, prosecute and prevent illegal off-shore banking practices. Without exaggeration, on the day Mr. Birkenfeld enters a federal penitentiary, every criminal using offshore secret banks to hide their ill-gotten gain will celebrate. The Department of Justice will, unintentionally, be party to a well-publicized worldwide event that will send a chill down the spine of any international banker who, like Mr. Birkenfeld, feels guilty about the practices they participate in and wants to help stop these insidious practices that undermine the rule of law.
Due to the destructive impact of Mr. Birkenfeld’s sentencing, honest U.S. taxpayers will continue to bear the burden of the $100 billion lost to the Treasury annually because of secret banking. Victims of crimes funded by laundered funds, often funneled through secret banks, will shudder. These secret accounts are used to hide "blood money": money stolen from development projects designed for the most impoverished; bribe money obtained by crooked politicians, undermining the rule of law; profits from illegal arms deals to terrorist organizations.
At Birkenfeld's sentencing in August, DOJ itself fully acknowledged Birkenfeld's voluntary disclosures and made clear that DOJ would not have opened the UBS case without his information:
The United States opened an investigation based on information provided by Birkenfeld...This substantial assistance has been timely, significant, useful, truthful, complete and reliable.
Birkenfeld's information didn't just serve to expose thousands of illegal accounts; the case has yielded fines and penalties of $780 million. Yet, after taking and using all of the information he provided, DOJ still prosecuted Birkenfeld. And, while Birkenfeld's reward is a jail sentence, Birkenfeld's criminal colleagues - like Martin Leichti, Birkenfeld's ex-boss, who was allowed to return to Switzerland - are enjoying the benefits of hiding their criminal behavior: freedom and wealth.
So, as the letter asks, so do I:
Will the Department of Justice imprison the international banker who had the courage to voluntarily step forward and blow the whistle on one of the world’s most powerful corporations? Or will the Department of Justice use the Bradley Birkenfeld case as an historic opportunity to promote whistleblowing in the fight against corrupt international banks?
Three advocacy groups asked U.S. Attorney General Eric Holder Thursday to personally review the case of the prison-bound banker who helped U.S. tax authorities build their groundbreaking case against UBS AG (UBS).
The groups said in a letter to Holder that former UBS private banker Bradley Birkenfeld, who was sentenced in August to 40 months in prison for helping the Swiss bank's clients evade taxes, should have been given protections as a whistleblower and granted immunity from prosecution.
This post was written by GAP International Reform Director Beatrice Edwards for her Daily Kos Blog.
On Friday, October 16th, Raj Rajaratnam, a Sri Lanka national and hedge fund manager was arrested at his Manhattan home and charged with insider trading by the US Justice Department and the Securities and Exchange Commission (SEC). As the manager of Galleon Management LP, a Wall St. hedge fund, Rajaratnam is accused of running a network of IT and health care company insiders who helped him amass $20 million in profits in the past three years.
As it turns out, in addition to benefiting from private information while making trades for his fund’s hedgers, Rajaratnam also cashed in on public largesse through his corporations’ access to generous loans from the World Bank Group.
Rajaratnam, who is now US-based, is one of the largest foreign investors in publicly traded Sri Lankan corporations. He is the second principal investor in John Keells Holdings, Ltd. (JKH), the largest Sri Lankan conglomerate in the country, and he's an important investor in Dialog, the national telecom firm. Rajaratnam’s hedge fund also is a principal stockholder in the National Development Bank of Sri Lanka (NDB) and the Commercial Bank of Ceylon (CBC). All four companies collected credit from the International Finance Corporation (IFC) – the private sector lending arm of the World Bank Group – over the past two years. The NDB established a risk-sharing facility with the IFC for up to $30 million two months ago. The CBC collected an investment from the IFC of $60 million in July 2008; JKH finalized a lending facility for up to $100 million in February, 2008, and Dialog’s most recent IFC loan amounted to another $100 million in August, 2007.
Well before the IFC loans were approved for companies in which Rajaratnam had a major stake, his reputation was, well, dubious. He had been investigated and fined nearly $2 million by the SEC in 2005 for "improper short-selling" of 17 stocks. In 2007, a charity he had strongly supported was closed down for funneling donations to the Tamil Tigers insurgency in Sri Lanka.
At the time the IFC loan for JKH came Rajaratnam’s way, the company’s reputation for integrity was also highly suspect. The corporation had effected an extremely smelly privatization deal that was under review by the Supreme Court of Sri Lanka, and four months after the IFC finalized its loan to JKH, the company’s Chairman was found to have worked "to secure illegal advantages....adverse to the public interest." The privatization deal manipulated by JKH was reversed by the Court as ‘unlawful.’ The Sri Lankan Secretary to the Treasury admitted violating the Sri Lankan Constitution as well as his oath of office for handing over to JKH a prosperous, revenue-producing state asset for a fraction of its real value, and structuring the deal as a private monopoly on essential port services.
Despite its history of backing Rajaratnam's Sri Lankan investments well after serious questions had been raised about the hedger's ethics, the IFC posts the following statement on its website:
"The IFC is at the forefront of the market and of development institutions in guarding against fraud and corruption in its projects. This approach complements and supports IFC's determination to act as a leader on sustainability. Avoiding fraud and corruption is necessary to ensure that IFC's investments are successful, that its resources are being used effectively, and that its development objectives are met."
This post was written by GAP Homeland Security Director Jesselyn Radack for her Daily Kos Blog.
The Justice Department sued UBS, Switzerland's largest bank, seeking the names of 52,000 customers using Swiss bank accounts to evade taxes. In its lame settlement of the case (it's a joke to call this plea a "bargain"), Switzerland agreed to turn over 4,500 names (fewer than 10% of those the U.S. sought.)
The IRS, which obviously misunderstands basic game theory, set up an Amnesty Program for the Super-Rich, through which offshore account-holders can come forward and avoid criminal liability. This is an insult to those of us who obey the law and pay our taxes . . . but to up the yuck factor, the IRS is now inflating its numbers to make its flaccid program look "robust." Sounds like the IRS office should be bombarded with Freedom of Information Act requests to IRS, Whistleblower Office, 1111 Constitution Avenue, N.W., Washington, D.C. 20224.
The deadline for the IRS Voluntary Disclosure Program (a.k.a. the "Amnesty Program for the Super-Rich") was yesterday. Under the program, which started in March, the IRS said that 3000 people came forward as of September 21. The IRS extended the program until yesterday, and if we are to believe the IRS numbers, another 4000 tax dodgers came in.
This is far-fetched. I can believe that during the first 6 months, 3000 tax cheats come forward. But I'm supposed t believe that during the past 3 weeks, 4000 come forward? You can't chalk it up to a bunch of last-minute guilty consciences, or else you would have seen the same confessional influx right before the program originally expired in late September.
I wish I could take the IRS at its word, but the UBS scandal has been so fraught with government lies, that I can't believe anything it says these days. The United States had UBS kingpin Martin Leichti in custody, let him plead the 5th, and return to Switzerland--a free man. It also did a show indictment of Leichti's deputy, Raoul Weil, who is now galavanting around Switzerland and Lichtenstein.
Meanwhile, the whistleblower who made the whole case possible, Brad Birkenfeld, is the only one to be sentenced to jail. http://abcnews.go.com/... In the government's own words,
Without Mr. Birkenfeld walking into the door of the Department of Justice, I doubt as of today that this massive fraud scheme would have been discovered by the U.S. Government.
(Sentencing Transcript, p.12).
But the government has been all over the map on whether Birkenfeld is a whistleblower. In 2007, when he initially came forward, the Justice Department told him,
[T]he Department of Justice does not, in any way, participate in the Whistleblower Reward Program.
But then, contradicting this, during a 2009 Senate hearing, Senator McCaskill asked IRS Commissioner Doug Shulman,
Was there a whistleblower in this case?
Shulman deferred the question to Justice Department senior tax attorney John DiCicco, who answered,
Brad Birkenfeld . . .
Then a few weeks ago, DiCicco told TIME magazine that Birkenfeld "is not entitled to whistleblower status," supposedly because he "did not give full an accurate disclosures during his proffer." This is contradicted by the Justice Department’s own Motion for Sentence Reduction in which it said:
Birkenfeld provided substantial assistance . . . This substantial assistance has been timely, significant, useful, truthful complete, and reliable.
So, was the government lying then, or is it lying now? The fact of the matter is that, to quote Dean Zerbe, author of the IRS Whistleblower law, the government couldn't spell "UBS" before it met Brad Birkenfeld.
And as for the Amnesty Program for the Super-Rich, the IRS needs to double-check its returns.
