Former UBS banker finally gets his just rewards

Bradley Birkenfeld, the former UBS banker who went to prison after telling the United States Internal Revenue Service how the bank helped thousands of Americans evade taxes, secured a whistle-blower award of US$104 million, the largest individual federal payout in US history.

Birkenfeld told authorities how UBS bankers came to the US to woo rich Americans, managed US$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, US Senate, IRS and Securities and Exchange Commission. He left prison on August 1.

"The IRS sent 104 million messages to whistle-blowers around the world - that there is now a safe and secure way to report tax fraud," Birkenfeld's lawyer Stephen Kohn said at a news conference in Washington on Tuesday. He is seeking a presidential pardon for Birkenfeld, who is under home confinement.

Birkenfeld's disclosures preceded UBS's decision to pay US$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 US$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 US. 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 programme. Turn yourself in before your banker does."