It has all the makings of a Hollywood blockbuster: banker helps his clients evade taxes until he gains a conscience and becomes the man almost single-handedly exposes the Swiss banking system as a giant engine for hiding vast sums of money from the IRS. Because he played an active role in the tax evasion, he goes to prison. But because he blew the whistle, he becomes a multi-millionaire less than six weeks after he’s released.
But Bradley Birkenfeld’s story is more than a fascinating tale. It’s also a valuable lesson for all companies on the government’s increasing reliance on whistleblowers to expose corporate fraud. Early takeaways:
From Jewell Lim Esposito (Constangy, Brooks & Smith):
“Employees will by-pass their own management to complain directly to the IRS about tax issues they suspect, particularly if the prospect of an award so far exceeds any holiday bonus they may get or any class action of which they think they should take part.”
From Jeanne Long (Warner Norcross & Judd):
"Many commentators are pointing to the unprecedented size of the whistleblower award as a boon for whistleblowing that is likely to encourage more individuals to help uncover fraud."
From Roy Berg and James Gifford (Moodys LLP Tax Advisors):
“Few doubt that the era of foreign bank secrecy is over, but does this award portend the beginning of the era of the vigilante tax snitch?”
Read the updates:
• Former Employee Nets $104M in Blowing Whistle re: Tax Issues - Constangy, Brooks & Smith, LLP
• IRS Awards $104 Million To Whistleblower - Warner Norcross & Judd
• Tax whistleblower gets $104m from IRS - Moodys LLP Tax Advisors