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Why Is the Whistleblower Who Exposed the Massive UBS Tax Evasion Scheme the Only One Heading to Prison?
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[MEDIA]http://blip.tv/file/get/Demnow-DemocracyNowThursdayJanuary72010995.mp4[/MEDIA]
Transcript
JUAN GONZALEZ: A former banker for the Swiss giant UBS who blew the whistle on the biggest tax evasion scheme in US history is preparing to head to prison tomorrow to begin serving a forty-month federal sentence.
Bradley Birkenfeld first came forward to US authorities in 2007 and began providing inside information on how UBS was helping thousands of Americans hide assets in secret Swiss accounts. UBS pleaded guilty last February and paid a $780 million fine. UBS has also agreed to turn over the names of the nearly 4,500 of its American clients to the Justice Department. That’s only a portion of the 19,000 it claims the secret accounts of Americans it held. Meanwhile, thousands of other Americans with unreported offshore accounts have been allowed to belatedly disclose them and pay civil penalties.
AMY GOODMAN Government prosecutors have admitted the massive fraud scheme would probably not have been discovered without Birkenfeld blowing the whistle on UBS. So why is he the only one going to jail? Prosecutors claim Birkenfeld withheld information on how he had helped his biggest US client, California billionaire Igor Olenicoff, hide hundreds of millions of dollars in assets. Birkenfeld pleaded guilty in 2008 and received a forty-month sentence. His lawyers filed a formal complaint this week with the US Attorney General’s Office of Professional Responsibility, claiming the “main allegations used to secure [Birkenfeld’s] indictment and imprisonment were not based on accurate or truthful information.”
Stephen Kohn is now Bradley Birkenfeld’s attorney. He’s the executive director of the National Whistleblowers Center. He joins us now from Washington, DC.
Stephen Kohn, welcome to Democracy Now! Just explain why Bradley Birkenfeld is going to prison tomorrow.
STEPHEN KOHN: Well, the prosecutor before the court said Mr. Birkenfeld was going to jail because he failed to disclose in 2007 his relationship with this billionaire, Mr. Olenicoff. Our investigation has shown that statement was not true.
When Birkenfeld met with the Justice Department, he begged them for a subpoena, or other compulsory service, to reveal names of clients, which was illegal under Swiss law. He was living in Switzerland at the time. They wouldn’t. So Mr. Birkenfeld went and asked the Senate Committee on Investigations to subpoena him. They did. Two days after getting that subpoena, in a sworn deposition, he revealed all his information about Mr. Olenicoff onto the record. That was all done in 2007, before Olenicoff was indicted and before he entered any plea. If there was any conspiracy to hold—to hide information about Olenicoff, it was from the Justice Department, that wouldn’t give Mr. Birkenfeld the process he needed to comply with Swiss law. And it was very simple for them to do that. Once he got it, he turned over all the names. He did it before the indictment. So then the prosecutor, to sentence Mr. Birkenfeld to forty months in jail, appears in court and accuses Birkenfeld of withholding Olenicoff, which was not true.
What’s triple outrageous—I’m going beyond double—is that then they recommend thirty months imprisonment for Birkenfeld. He gets forty months, more than probably every single tax cheat, the 19,000 of them that he turned in, will get collectively. Olenicoff, the billionaire, who for twenty years was hiding millions and millions of dollars willfully, got probation. A guy named Liechti, who was Birkenfeld’s third line supervisor in the Swiss bank, who was in charge of all the illegal accounts, who was detained and arrested by the Justice Department, was released and let to go back to Switzerland with no prison time or even a conviction, whereas Birkenfeld, who blew the whistle on the whole scheme voluntarily, is going to serve more time in prison than the worst of the wrongdoers that were involved in holding back $20 billion in illegal accounts.
JUAN GONZALEZ: Stephen Kohn, I interviewed you at length earlier this week and wrote a column in the Daily News about this case, and I was astounded, as you presented the documents that you have accumulated, your client has accumulated over the years, for over how long a period Bradley Birkenfeld actually tried to get anybody to listen to what he believed was the illegal activity involved here. He first, for a period of more than a year, tried to get his own bank to investigate the situation, finally resigning. Then he goes not only to the Justice Department; he went to the IRS, he went to the Securities and Exchange Commission, as well as—as well as the Senate Investigations Committee. So it appears that he was actually trying to say, “Hey, this is a major, major international fraud operating here that I was involved in,” but the government—until the Senate committee got involved, apparently no one wanted to listen.
STEPHEN KOHN: Well, what happened was—you’re 100 percent right. The record shows he went to—he was a typical whistleblower. When he read a document, that triggered, and he realized what he was doing was illegal—and even some of it illegal under Swiss law, by the way—he went to his supervisor. And as he tells it, he almost had a fistfight. I mean, they had an argument. That’s typical. He then went to internal compliance. He went to the lawyers. He wrote emails. He then filed an official whistleblower complaint within UBS, all of which was covered up.
He then travels to America. Big mistake. He went to the Justice Department criminal lawyers who do tax fraud. Those folks looked at him as an easy mark. Here’s a guy walking in the door who is giving you information about a massive tax fraud, voluntarily, without immunity. They said, “Oh, we’ll just go throw this guy in jail.” So that’s why they wouldn’t subpoena him or give him immunity or do things necessary to get all the information, because they wanted to get him from the start. It’s clear.
Now, Birkenfeld was a whistleblower. When he detected this hostility from Justice—and, by the way, he met with them for two full days and turned over all the information about the bank. But he detected that hostility, so he instructed his lawyers, and they reached out separately to the Securities Exchange Commission, the Internal Revenue Service and the Senate. And at his own expense—he’s living in Switzerland—he voluntarily flies to the United States and meets with these other groups and makes major disclosures, the same disclosures that he made to the Justice Department about UBS, but also disclosures about the clients.
What’s good about the Senate disclosure is they had a court reporter who took it down. No one can deny it. It has the date. It has the statements. So as the Justice Department has attempted to mislead the public about what Mr. Birkenfeld did and when he did it, there’s a transcript that proves Birkenfeld right.
He was a traditional whistleblower. He did what he did to serve the interest. And what’s incredible is that taxpayers, you and I, are saving billions. As Juan correctly pointed out, UBS paid a $780 million fine. That’s the beginning of it. So far, 14,000 tax cheats—these are millionaires, powerful people who had illegal Swiss accounts—have all come in and voluntarily disclosed their crimes. Why? They only have to pay a penalty. They don’t go to jail. And their identities remain secret. So there are people who have withheld—
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.
.
.
.
.
Bradley Birkenfeld first came forward to US authorities in 2007 and began providing inside information on how UBS was helping thousands of Americans hide assets in secret Swiss accounts. UBS pleaded guilty last February and paid a $780 million fine. UBS has also agreed to turn over the names of the nearly 4,500 of its American clients to the Justice Department. That’s only a portion of the 19,000 it claims the secret accounts of Americans it held. Meanwhile, thousands of other Americans with unreported offshore accounts have been allowed to belatedly disclose them and pay civil penalties.
AMY GOODMAN Government prosecutors have admitted the massive fraud scheme would probably not have been discovered without Birkenfeld blowing the whistle on UBS. So why is he the only one going to jail? Prosecutors claim Birkenfeld withheld information on how he had helped his biggest US client, California billionaire Igor Olenicoff, hide hundreds of millions of dollars in assets. Birkenfeld pleaded guilty in 2008 and received a forty-month sentence. His lawyers filed a formal complaint this week with the US Attorney General’s Office of Professional Responsibility, claiming the “main allegations used to secure [Birkenfeld’s] indictment and imprisonment were not based on accurate or truthful information.”
Stephen Kohn is now Bradley Birkenfeld’s attorney. He’s the executive director of the National Whistleblowers Center. He joins us now from Washington, DC.
Stephen Kohn, welcome to Democracy Now! Just explain why Bradley Birkenfeld is going to prison tomorrow.
STEPHEN KOHN: Well, the prosecutor before the court said Mr. Birkenfeld was going to jail because he failed to disclose in 2007 his relationship with this billionaire, Mr. Olenicoff. Our investigation has shown that statement was not true.
When Birkenfeld met with the Justice Department, he begged them for a subpoena, or other compulsory service, to reveal names of clients, which was illegal under Swiss law. He was living in Switzerland at the time. They wouldn’t. So Mr. Birkenfeld went and asked the Senate Committee on Investigations to subpoena him. They did. Two days after getting that subpoena, in a sworn deposition, he revealed all his information about Mr. Olenicoff onto the record. That was all done in 2007, before Olenicoff was indicted and before he entered any plea. If there was any conspiracy to hold—to hide information about Olenicoff, it was from the Justice Department, that wouldn’t give Mr. Birkenfeld the process he needed to comply with Swiss law. And it was very simple for them to do that. Once he got it, he turned over all the names. He did it before the indictment. So then the prosecutor, to sentence Mr. Birkenfeld to forty months in jail, appears in court and accuses Birkenfeld of withholding Olenicoff, which was not true.
What’s triple outrageous—I’m going beyond double—is that then they recommend thirty months imprisonment for Birkenfeld. He gets forty months, more than probably every single tax cheat, the 19,000 of them that he turned in, will get collectively. Olenicoff, the billionaire, who for twenty years was hiding millions and millions of dollars willfully, got probation. A guy named Liechti, who was Birkenfeld’s third line supervisor in the Swiss bank, who was in charge of all the illegal accounts, who was detained and arrested by the Justice Department, was released and let to go back to Switzerland with no prison time or even a conviction, whereas Birkenfeld, who blew the whistle on the whole scheme voluntarily, is going to serve more time in prison than the worst of the wrongdoers that were involved in holding back $20 billion in illegal accounts.
JUAN GONZALEZ: Stephen Kohn, I interviewed you at length earlier this week and wrote a column in the Daily News about this case, and I was astounded, as you presented the documents that you have accumulated, your client has accumulated over the years, for over how long a period Bradley Birkenfeld actually tried to get anybody to listen to what he believed was the illegal activity involved here. He first, for a period of more than a year, tried to get his own bank to investigate the situation, finally resigning. Then he goes not only to the Justice Department; he went to the IRS, he went to the Securities and Exchange Commission, as well as—as well as the Senate Investigations Committee. So it appears that he was actually trying to say, “Hey, this is a major, major international fraud operating here that I was involved in,” but the government—until the Senate committee got involved, apparently no one wanted to listen.
STEPHEN KOHN: Well, what happened was—you’re 100 percent right. The record shows he went to—he was a typical whistleblower. When he read a document, that triggered, and he realized what he was doing was illegal—and even some of it illegal under Swiss law, by the way—he went to his supervisor. And as he tells it, he almost had a fistfight. I mean, they had an argument. That’s typical. He then went to internal compliance. He went to the lawyers. He wrote emails. He then filed an official whistleblower complaint within UBS, all of which was covered up.
He then travels to America. Big mistake. He went to the Justice Department criminal lawyers who do tax fraud. Those folks looked at him as an easy mark. Here’s a guy walking in the door who is giving you information about a massive tax fraud, voluntarily, without immunity. They said, “Oh, we’ll just go throw this guy in jail.” So that’s why they wouldn’t subpoena him or give him immunity or do things necessary to get all the information, because they wanted to get him from the start. It’s clear.
Now, Birkenfeld was a whistleblower. When he detected this hostility from Justice—and, by the way, he met with them for two full days and turned over all the information about the bank. But he detected that hostility, so he instructed his lawyers, and they reached out separately to the Securities Exchange Commission, the Internal Revenue Service and the Senate. And at his own expense—he’s living in Switzerland—he voluntarily flies to the United States and meets with these other groups and makes major disclosures, the same disclosures that he made to the Justice Department about UBS, but also disclosures about the clients.
What’s good about the Senate disclosure is they had a court reporter who took it down. No one can deny it. It has the date. It has the statements. So as the Justice Department has attempted to mislead the public about what Mr. Birkenfeld did and when he did it, there’s a transcript that proves Birkenfeld right.
He was a traditional whistleblower. He did what he did to serve the interest. And what’s incredible is that taxpayers, you and I, are saving billions. As Juan correctly pointed out, UBS paid a $780 million fine. That’s the beginning of it. So far, 14,000 tax cheats—these are millionaires, powerful people who had illegal Swiss accounts—have all come in and voluntarily disclosed their crimes. Why? They only have to pay a penalty. They don’t go to jail. And their identities remain secret. So there are people who have withheld—
.
.
.
.
.
.
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