UBS Whistle-Blower Gets $104 Million Reward From the IRS

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Former UBS (NYSE: UBS  ) employee Bradley Birkenfeld, in what is reportedly the largest-ever settlement for a U.S. whistle-blower, has been awarded $104 million for his role in revealing a massive tax fraud conspiracy at the Swiss-based bank.

Having detailed how UBS went about recruiting U.S. clients, managing billions of their assets, and helping illegally shield their assets from the IRS, Birkenfeld, 47, went to prison in 2010 after pleading guilty to conspiracy. He was released on Aug. 1.

The $104 million award is the largest yet to come from the IRS whistle-blower program, designed to incentivize tipsters to report tax dodging. Taxpayers underpay by $385 billion annually, the IRS claims.

UBS was not prosecuted for its role, opting instead to pay a $780 million fine, admit to wrongdoing, and hand over data on more than 4,000 user accounts.

Another former banker at both UBS and rival Swiss bank Credit Suisse (NYSE: CS  ) , Christos Bagios, was banned from leaving the U.S. on Saturday to visit his family in Europe. He is charged with helping American clients hide as much as $500 million from the IRS while at UBS.

Fool contributor John Divine owns none of the stocks mentioned in the story above. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

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Read/Post Comments (3) | Recommend This Article (5)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 11, 2012, at 3:11 PM, Turfscape wrote:

    Hmmm...what's the tax rate on a $104 million reward from the IRS?

  • Report this Comment On September 11, 2012, at 3:47 PM, Clint35 wrote:

    So you can get paid a lot for helping the IRS. But you also have to do time in prison. Great system. Yes, sarcasm is intended.

  • Report this Comment On September 11, 2012, at 4:13 PM, Turfscape wrote:

    For $104 million dollars, I'll serve two years in prison.

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