Bradley Birkenfeld broke the back of Swiss bank secrecy and was awarded $104 million by the IRS.

Birkenfeld was an international banker and wealth manager at UBS Bank in Switzerland, who blew the whistle on a massive tax evasion scheme under the IRS whistleblower program. UBS was forced to pay a fine of $780 million and turn over the names of over 4,450 U.S. taxpayers.

Whistleblower Attorneys - Representing Bradley Birkenfeld

UBS Insider Blows Open Swiss Banking Secrecy

Bradley Birkenfeld, a former wealth manager at UBS, became entangled in a massive tax evasion scheme for U.S. citizens. UBS actively helped these clients hide assets in secret Swiss accounts, exploiting strict banking secrecy laws to avoid U.S. taxes.

Disillusioned, Birkenfeld approached U.S. authorities in 2007. His insider knowledge of UBS’s illegal practices exposed the bank’s underbelly and sparked a historic shift. Birkenfeld’s whistleblowing blew the lid off Swiss banking secrecy, leading to a landmark settlement. UBS paid a hefty $780 million fine and, along with the Swiss government, agreed to reveal the identities of thousands of suspected tax evaders.

Birkenfeld’s courage not only exposed a global financial wrongdoing but also earned him the largest whistleblower reward ever awarded at the time – a staggering $104 million. In granting the award, the IRS explained:

“Birkenfeld provided information . . . that the IRS had been unable to detect, provided exceptional cooperation, identified connections between parties and transactions (and the methods used by UBS AG), and the information led to substantial changes in UBS business practices and commitment to future compliance. . . The comprehensive information provided by the whistleblower was exceptional in both its breath and depth. . . The information provided by the whistleblower formed the basis for unprecedented actions against UBS AG, with collateral impact on other enforcement activities . . .”

UBS Bank - Bradley Birkenfeld
UBS Bank, Geneva

UBS Bank was considered the largest and most secretive Swiss bank in the world at that time Birkenfeld blew the whistle.

The news of Bradley Birkenfeld’s record-breaking whistleblower reward sent shockwaves through the Swiss banking industry.

At a Geneva conference, the mood turned sour as bankers learned of the $104 million payout. Reports described them “seething” with anger, attacking Birkenfeld’s morals for exposing their practices. But beneath the fury, a new reality dawned. Banking leaders acknowledged that hefty whistleblower rewards could change the game, particularly for U.S. accounts.

One respected consultant, international wealth management consultant Osmond Plummer, declared the U.S. client offshore program dead. “Banking secrecy is no longer there,” he stated bluntly. “Something has to change in Switzerland.” Birkenfeld, they grudgingly admitted, had struck a fatal blow to their once-impenetrable system.

Bradley Birkenfeld - UBS Whistleblower
Whistleblower Bradley Birkenfeld

Birkenfeld became the center of international media attention after exposing the world's largest Swiss banking tax evasion scheme.

Birkenfeld’s Reward: A Seismic Shift in Tax Enforcement

The announcement of Bradley Birkenfeld’s record-breaking whistleblower reward rippled through Switzerland. Swiss newspapers echoed the shockwaves.

Blick, a tabloid, saw the award as evidence of the U.S.’s relentless pursuit of tax evaders. Tages-Anzeiger, a Zurich paper, called it a “seductive offer for bankers,” highlighting the potential for future whistleblowers. Le Temps, a French daily, agreed – the reward could incentivize others to speak up.

But the most impactful voices belonged to the Swiss bankers themselves. They grudgingly acknowledged Birkenfeld as a national hero, someone who exposed illegal practices impacting American taxpayers.

Professor Dennis Ventry, chairman of the IRS Advisory Council, confirmed this narrative. Birkenfeld’s information, he said, formed the “treasure trove” that dismantled UBS’s illegal scheme. The U.S. government leveraged this information to great effect:

  • A $780 million fine and names of 250 high-profile Americans from UBS.
  • An additional 4,450 names through a joint U.S.-Swiss settlement.
  • Over 120 criminal indictments.
  • Billions recovered through the IRS whistleblower program.

Birkenfeld’s bravery triggered a domino effect – bank closures, program participation, and aggressive IRS action against tax dodgers. By 2018, more than 56,000 delinquent taxpayers had come forward, and the U.S. had collected over $11 billion in back taxes and prosecuted numerous banks. The estimated total recovered: a staggering $16.19 billion.

Birkenfeld’s Pioneering Case Paves the Way for Participant Whistleblowers

Bradley Birkenfeld’s initial attempt to expose tax fraud backfired. His chosen legal team didn’t position him as a whistleblower, leading to charges and jail time.

However, after hiring our firm, Birkenfeld’s case took a historic turn. Kohn, Kohn and Colapinto successfully argued that whistleblowers could include “participants” in the fraud itself – a crucial distinction from the masterminds. This meant even bankers involved in opening secret accounts could qualify for whistleblower rewards.

This landmark decision had a ripple effect. It was incorporated into the Dodd-Frank Act and became a beacon for future “participant” whistleblowers. Previously hidden white-collar crimes, often reliant on insider knowledge, became more exposed. Now, participants could come forward with valuable information, protected from the initial prosecution Birkenfeld faced.

Lucifer’s Banker Uncensored: The Untold Story of How I Destroyed Swiss Bank Secrecy

Lucifer’s Banker Uncensored
The Untold Story of How I Destroyed Swiss Bank Secrecy (2020)

As a private banker working for the largest bank in the world, UBS, Bradley Birkenfeld was an expert in Switzerland’s shell-game of offshore companies and secret numbered accounts. He wined and dined ultrawealthy clients whose millions of dollars were hidden away from business partners, spouses, and tax authorities. As his client list grew, Birkenfeld lived a life of money, fast cars, and beautiful women, but when he discovered that UBS was planning to betray him, he blew the whistle to the US Government.

Related Case Media