UBS whistleblower Birkenfeld now sues bank in US$20m libel lawsuit

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Bradley Birkenfeld, the former UBS Group AG banker, who as a whistleblower helped US authorities prosecute the Swiss bank for tax fraud, only to then spend two-and-a-half years in prison for helping a billionaire client evade taxes, has filed a US$20m libel lawsuit against his former employer.

Birkenfeld, who, following his release from prison, in 2012 got a record US$104m award from an Internal Revenue Service whistleblower program, has faulted UBS over statements that were published last November and this month by the New York Post and Bloomberg BNA Daily Tax Report.

According to reports on Reuters, Birkenfeld said UBS acted with “actual malice” by referring to his “often unsubstantiated” recollections in a recent book and having been “convicted in the US for, among other things, having lied to the US authorities.”

He said UBS did this as part of an international campaign to impede his effort to expose its “decades-long wrongdoing,” and undercut the credibility and sales of his book “Lucifer’s Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy” (cover, pictured left).

As reported, International Investment met with Birkenfeld, (pictured above), last November and conducted a special video interview where he criticised the actions of his former employer and laid out plans to help even more countries extract missing taxes from the firm.

Birkenfeld also named Peter Stack, UBS’ head of media relations in the Americas, as a defendant. The New York Post and Bloomberg are not defendants.

2010 case

Birkenfeld provided tips that led UBS in 2010 to pay a US$780m fine for helping about 19,000 wealthy Americans hide up to US$20bn in secret bank accounts.

He went to prison after pleading guilty in 2008 to a charge of conspiring to defraud the United States in connection with his client Igor Olenicoff, a real estate developer.

Olenicoff had pleaded guilty in 2007 to filing a false tax return but did not serve prison time.

More recently, Birkenfeld testified in a similar probe involving UBS in France and, as revealed in his interview with International Investment, was also in talks with Canada and other countries about how to assist them in retrieving ‘missing’ taxes.

In this new libel case, Birkenfeld’s lawsuit noted that the New York Post clarified its article to show he was “never charged with or convicted of perjury or lying to US investigatory authorities.”

Reuters said that UBS had no immediate comment on the lawsuit, which was filed in a New York state court in Manhattan and seeks US$10m of both compensatory and punitive damages.

Now 52, Birkenfeld now works with whistleblowers “so they can get their message out and eradicate waste, fraud and corruption in government, as well as corporations”, the report said.

The case is Birkenfeld v UBS AG et al, New York State Supreme Court, New York County.

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