Prosecutors credit Birkenfeld, 44, with exposing wrongdoing at UBS and leading investigators to thousands of suspected American tax cheaters who hid assets in the Swiss bank’s accounts. But they also said Birkenfeld failed to disclose his crimes, including his work for a California real estate magnate who pleaded guilty in 2007 to tax charges.
Prosecutors declined to comment on Zloch’s ruling. The Washington-based National Whistleblowers Center, whose attorneys are representing Birkenfeld, said in a statement that putting such a prominent informant in prison could “kill the goose that laid the golden eggs’’ by deterring others from coming forward.
“If the [Obama] administration is actually serious about going after offshore tax evasion they need to be encouraging whistle-blowers, not throwing them in jail,’’ said Dean Zerbe, special counsel at the Whistleblowers Center.
At Birkenfeld’s sentencing hearing in August, prosecutors said they may seek a sentence reduction if he continues to cooperate, but to date have not done so.
Birkenfeld, a US citizen who lived in Switzerland for 15 years, has been described as the most important informant in the US probe of tax evasion and secrecy at UBS and other banks. Armed with his disclosures, US officials reached a deferred prosecution agreement with UBS last February in which the bank agreed to pay a $780 million fine and reveal names of some 150 clients.
Later in 2009, UBS agreed under US pressure to release names of 4,450 wealthy Americans suspected of using secret accounts to evade billions of dollars in US taxes. None of those names has been made public, but several other former UBS clients have been prosecuted in the US based on the initial disclosures.
Birkenfeld has applied with the Internal Revenue Service for a whistle-blower reward that, if approved, could bring him tens of millions of dollars, if not more.
