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Ex-UBS banker sentenced to 40 months in prison for helping client hide assets

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] Former UBS banker Bradley Birkenfeld was sentenced to 40 months in prison Friday for helping a client avoid paying over $7.2 million dollars in taxes. Birkenfeld admitted to helping a California real-estate developer hide $200 million to avoid paying taxes and has cooperated with the government in its investigation of employees of Swiss banks that the government says take advantage of Switzerland's strict confidentiality laws to help Americans hide money and avoid paying taxes. Birkenfeld, who was sentenced by Judge William Zloch in the US District Court for the Southern District of Florida, had hoped his cooperation would lead to a suspended sentence while on Wednesday, prosecutors recommended a 30-month sentence. The government may ask for a reduced sentence as Birkenfeld continues to help the government in its investigation. On Thursday, a Swiss lawyer and a Swiss banking executive were indicted in the Southern District of Florida for allegedly helping clients hide assets. Earlier this week, the US government reached an agreement with Switzerland that would grant the IRS access to information on thousands of Swiss bank accounts. As part of the agreement, the Swiss government will instruct banking giant UBS to begin to turn over information regarding certain anonymous bank accounts. In return, the US will cease unilateral efforts to seek account holder information, including withdrawing motions to enforce "John Doe" summons. In early May, the Obama administration announced revisions to the tax code designed to curb overseas tax havens. One week earlier, the Swiss government filed an amicus curiae brief in the US District Court for the Southern District of Florida, alleging that the attempt to obtain account holder information by the US violated Swiss national sovereignty. Earlier this year, the Swiss announced their intention to adopt a more stringent definition of tax evasion and to work with other countries to investigate such claims.

Full post as published by JURIST - The Paper Chase on August 22, 2009 (boomark / email).