Business
4:18 am
Wed September 12, 2012

IRS Awards $104 Million To Whistle-Blower

Originally published on Wed September 12, 2012 8:28 pm

Transcript

STEVE INSKEEP, HOST:

After a scandal, somebody finally gets rich for doing the right thing. It's NPR's business news.

A former banker, Bradley Birkenfeld, has just been awarded $104 million by the IRS. That is believed to be the largest amount ever paid to an individual whistle-blower. Birkenfeld told the IRS how a Swiss bank was helping thousands of Americans evade taxes, and was then thrown in jail.

RENEE MONTAGNE, HOST:

NPR's Wendy Kaufman has more.

WENDY KAUFMAN, BYLINE: Birkenfeld, now in late 40s, worked for the giant Swiss bank UBS, and in 2007, he provided U.S. officials with extraordinary information about Swiss bank accounts and how they worked.

STEPHEN KOHN: Birkenfeld was from the inside of this secret system that no one had ever been able to crack.

KAUFMAN: That's Birkenfeld's lawyer Stephen Kohn of the National Whistleblowers Center. He says his client provided detailed information about how UBS bankers traveled to the U.S. and got wealthy Americans to set up secret Swiss accounts so they wouldn't have to pay taxes.

KOHN: He came in with boxes of documents; names, phone numbers, email addresses, the hotels, the events...

KAUFMAN: According to the IRS, his information formed the basis for an unprecedented action against the Swiss Bank. As part of a settlement, UBS paid the U.S. government $780 million and ultimately turned over information on thousands of Swiss accounts held by U.S. citizens. That led to a sizeable number of Americans voluntarily disclosing their offshore accounts, generating billions in additional tax revenue.

But Birkenfeld paid a price for his disclosures, pleading guilty to conspiracy for his role in the scheme. He spent more than two and a half years in prison. His lawyer says because of whistle-blower laws, he should never have been prosecuted.

Wendy Kaufman, NPR News. Transcript provided by NPR, Copyright NPR.