Legal News

UBS Informant Wants Prison Postponed, Is ?Ready? to Cooperate

By Amir Efrati

The tale of former UBS banker Brad Birkenfeld has taken many twists since June of last year, when it was revealed he had been helping U.S. authorities bring a ground-breaking criminal case against the Swiss banking giant for helping Americans evade taxes.

UBS agreed in February to pay $780 million as part of a deal to avoid prosecution, and in August the bank agreed to reveal the identities of approximately 4,450 of its U.S. clients who are suspected of hiding offshore accounts.

Just last month, we brought you word that Birkenfeld could reap a lot of dough for his whistleblowing, which eventually led to more than 14,000 UBS clients admitting to tax evasion to the Internal Revenue Service. (We recommend reading this Portfolio magazine profile of Birkenfeld from last year.)

After all that, Birkenfeld, was sentenced to 40 months in prison for his own role in the scheme, and he’s not happy about it.

On Saturday night, Birkenfeld (pictured, right) made a filing requesting that a Florida federal judge postpone his prison term and reconsider his sentence. Click here for the WSJ.com story.

Why should his term be put off? Birkenfeld, who is scheduled to report to prison by Jan. 8, said he is “ready, willing and able” to assist the government in prosecuting additional U.S. clients of UBS. That’s a curious offer, considering that Birkenfeld’s lawyers said prosecutors haven’t met with him since he was sentenced in August for helping UBS clients evade U.S. taxes.

The former private banker also used the Saturday court filing to dispute prosecutors’ statements in court that he wasn’t fully forthcoming while cooperating with the U.S.

Prosecutors have acknowledged that they had no case against UBS without Birkenfeld but said they sought prison time because he wasn’t forthcoming about his own role in the scheme and, among other things, didn’t provide information on his biggest client, California billionaire Igor Olenicoff, who pleaded guilty in 2007 to filing a false tax return.

But Birkenfeld says the Justice Department never provided him legal safeguards he needed to give them UBS client information, in violation of Swiss law. He added in the court motion that he disclosed Olenicoff’s identity in 2007 to a Senate committee that was investigating tax havens and also gave similar information to the Securities and Exchange Commission and the Internal Revenue Service.

Full post as published by Law Blog - WSJ.com on December 28, 2009 (boomark / email).