Bradley Birkenfeld, a key informant in a U.S. investigation of offshore tax evasion aided by UBS AG, claimed in a complaint that federal prosecutors made false statements to a judge who sentenced him to 40 months in prison.
Lawyers for Birkenfeld, a former UBS banker, claimed prosecutors made “inaccurate, misleading and incomplete” statements about him at his Aug. 21 sentencing hearing and in an interview on CBS Corp.’s 60 Minutes television show aired Jan. 3. Birkenfeld, 44, must report to prison on Jan. 8 and can’t extend his surrender date as he requested, a judge ruled Jan. 4.
Birkenfeld asked for an internal probe in a letter yesterday to U.S. Attorney General Eric Holder and the Justice Department’s Office of Professional Responsibility, which investigates allegations of attorney misconduct. Birkenfeld began telling U.S. authorities in 2007 how UBS helped Americans hide assets in secret Swiss accounts. He pleaded guilty in 2008 to helping California billionaire Igor Olenicoff and others evade taxes.
“It is one thing to hold Mr. Birkenfeld accountable for wrongdoing,” Birkenfeld’s lawyers wrote. “It is another thing altogether to imprison Mr. Birkenfeld on false information, especially when he is treated far more harshly than the wrongdoers who actually profited from the illegal tax schemes that Mr. Birkenfeld disclosed.”
Justice Department spokeswoman Tracy Schmaler said in a statement that Birkenfeld pleaded guilty to conspiracy to defraud the U.S. and admitted criminal wrongdoing.
‘Same Issues’
“At his sentencing in August, Mr. Birkenfeld made arguments for leniency,” Schmaler said. “In a motion filed in December, Mr. Birkenfeld requested a resentencing hearing citing the same issues raised in his letter to the Justice Department Office of Professional Responsibility. After consideration of these issues, that request was denied by a federal judge.”
Before his sentencing, Birkenfeld cooperated with the Justice Department, U.S. Senate and Internal Revenue Service probes of Zurich-based UBS. The bank paid $780 million in February and handed over data on 250 accounts to avoid prosecution. It agreed in August to turn over data on 4,450 clients sought by the IRS. Another 14,700 U.S. taxpayers disclosed offshore bank accounts to the IRS last year.
At his sentencing hearing in federal court in Fort Lauderdale, Florida, Justice Department prosecutor Kevin Downing said the U.S. couldn’t have unraveled the bank’s “massive tax fraud scheme” without Birkenfeld’s cooperation.
30 Months Recommended
Downing also recommended a 30-month term for Birkenfeld, saying he wasn’t initially truthful about Olenicoff. U.S. District Judge William Zloch, who could have imposed as many as five years, instead gave Birkenfeld a term of three years and four months.
Olenicoff, who pleaded guilty in 2007 to filing a false tax return, got two years’ probation and paid $52 million in back taxes, fines and penalties. Last year, six former UBS clients pleaded guilty.
Birkenfeld, who is under house arrest with electronic monitoring in Massachusetts, filed a motion Dec. 26 seeking a delay in his prison term and a hearing on a reduced sentence.
The letter was sent yesterday by attorneys Stephen Kohn and Dean Zerbe of the National Whistleblowers Center in Washington.
Birkenfeld first told U.S. Senate investigators about Olenicoff in October 2007, or two months before the California real-estate developer pleaded guilty, according to the letter. It referred to a Dec. 7 letter that Kohn sent to Holder which said his client told the Senate, the IRS and the Securities and Exchange Commission in 2007 about Olenicoff. Hard money training
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