US$5bn whistleblower says he can help Canada recover US$1bn in offshore taxes

A former banker-turned-whistleblower, who helped the US Treasury recover US$5bn in back taxes, fines, and penalties, earning himself US$100m in the process, has been unsuccessfully trying to provide information to Canadian parliamentarians and officials, which he says would recover an estimated US$1bn in taxes from offshore accounts.

According to a report in Canadian Weekly newspaper The Hill Times, Bradley Birkenfeld—an American banker who formerly worked with the Swiss bank UBS, and who received a record US$104m reward for helping the US Treasury with investigations— says that he has been trying to work with Canada on a similar exercise, without success.

But a senator on the Canadian government’s Banking, Trade, and Commerce committee says he’s interested and will ask committee members to consider inviting the former banker to appear before the committee to share the information.

“If somebody tells me, as a senator, that they can help find a billion dollars of illegal tax money, I’d be interested,” said British Columbia independent senator Larry Campbell in an interview with The Hill Times. But Campbell added that he wants to do his own due diligence with Birkenfeld before asking his committee to extend the invitation.

“It’s incumbent upon us to look at it, to see what we got here. If this is good information and it can stand up, it should be listened to and should be addressed,” Campbell said.

‘Valuable information’

In a telephone interview with The Hill Times, Birkenfeld said he would be happy to write a letter and send it to the committee, and that he can provide valuable information with documents that could help the Canadian authorities to recover unpaid federal taxes in offshore accounts.

Birkenfeld said he worked for UBS, a large Swiss Bank, between 2001 and 2006 and at that time his bank alone was managing Canadian assets worth US$5bn. He said if a parliamentary committee invites him, he would make a power point presentation on how the offshore investments are handled to avoid paying taxes, and will provide the names, phone numbers, and email addresses of bankers who handle Canadian offshore business in Switzerland.

“I’m happy to help, I will write this letter and have it sent to the chairman,” said Birkenfeld, who added that he does not expect any money in return for his cooperation.

A native of Massachusetts, Birkenfeld, 51, is the son of a neurosurgeon and who studied banking at the American Graduate School of Business in Switzerland. Prior to joining UBS in 2001, he worked at Credit Suisse and Barclays PLC in Geneva, Switzerland.

‘US$104m for his cooperation’

He told The Hill Times that he became a whistleblower in 2005 after he read a UBS document which indicated that some of the advice UBS bankers were providing to clients was illegal. He raised the issue with his superiors but no concrete action was taken to address it. In 2007, he began cooperating with the US tax authorities. The Internal Revenue Service eventually awarded him US$104m for his cooperation to recover billions of dollars in unpaid taxes, fines, and penalties.

While Birkenfeld was cooperating with the US authorities, the U.S. Justice Department convicted him on a charge of conspiracy for withholding information about one of his clients, a wealthy California real estate developer. Birkenfeld was sentenced 40 months in jail, while the real estate developer was only fined and was not sent to jail.

‘Untold story’

This week, Birkenfeld is launching his book in Washington D.C. entitled Lucifer’s Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy. According to a press release for the book launch, the readers will learn about the links between dirty money and the Swiss banking system; how billions of dollars circulated behind offshore banking’s closed doors.

Because of Birkenfeld’s conviction in the US on abetting tax evasion, according to Canadian law, he cannot enter Canada. If a parliamentary committee invites him to appear, Birkenfeld said, he would need a waiver from the Canadian authorities to allow him to enter the country.

Birkenfeld told The Hill Times that in addition to cooperating with the US authorities, he has travelled to France, Germany, Greece, the U.K., Norway, and India to provide information to the authorities about the offshore bank accounts of their citizens.

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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