Posts Tagged ‘Birkenfeld’
Friday, September 10th, 2010
UBS whistleblower Bradley Birkenfeld’s testimony led to a $780 million settlement and recovery of thousands of questionable Swiss bank accounts, as well as exposing one of the largest tax evasion schemes in the history of international banking. Despite the great risks that Birkenfeld took in coming forward, the United States Department of Justice indicted him, sentencing the whistleblower to 40 months of prison time. In similar cases, most whistleblowers like Birkenfeld – even those partially complicit in the actions they were decrying – received the metaphorical “slap on the wrist” in the form of a fine or suspension of trading licenses. Why, then, considering Birkenfeld’s voluntary and extensive participation, is he currently sitting in a medium security Pennsylvania prison?
Attorneys can find it difficult to maneuver the client safely through situations like Birkenfeld’s. Experienced qui tam attorneys recognize that whistleblowers come upon fraud sometimes because the whistleblowers are involved, at least marginally, in the questionable activity themselves. Although Birkenfeld admitted his complicity in the fraud, he aroused the DOJ’s ire by failing to fully disclose his wrong-doings. The prosecutors discovered the extent of Birkenfeld’s complicity at different intervals throughout the case instead of receiving a full disclosure from Birkenfeld at the outset. The prosecuting attorneys felt betrayed by Birkenfeld’s failure to be completely candid during the initial debriefings and believed his initial interviews to contain material misrepresentations, whether by commission or omission. The lack of initial disclosure complicated the DOJ’s investigation, diminished Birkenfeld’s credibility as a witness, and placed Birkenfeld in the unenviable position of seeking leniency for substantial criminal conduct while making material misrepresentations to the government.
There are several simple lessons to be learned from the unfortunate Birkenfeld saga. First, as a whistleblower be prepared to be entirely truthful about your role in the conduct that you are exposing. Do not expect to pick and choose what you will reveal to the government. Second, fully disclose everything to your counsel so that he or she can determine what is relevant and needs to be disclosed to the government. Conversations with counsel are protected by the attorney client privilege so those disclosures can be made without fear of them being revealed without your approval. Third, hire counsel experienced in evaluating potential criminal and civil liability in tax matters. There are steps that can be taken to protect your interests even if potential criminal exposure exists for your conduct. Experienced counsel can explain your options and see that your interests are protected while pursuing your whistle blower claim.
When you consult whistleblower counsel, feel comfortable that Kenney & McCafferty can advise you no matter what your situation. Kenney & McCafferty possesses the necessary experience in both civil and criminal tax matters to safely navigate the whistleblower through the difficult process of reporting tax fraud.