By Larry Teren
Apparently it pays to cheat and then rat on your accomplices. Yesterday, the Internal Revenue Service gave $104 million dollars to a scoundrel who spent about two and a half years in jail for committing fraud conspiracy. The fraud was helping a bunch of very wealthy Americans illegally hide money at Swiss Bank UBSAG.
As part of the original 2009 settlement between the US Federal Government and USB, the bank was fined $780 million and agreed to turn over the names of thousands of suspected tax dodgers whom they helped avoid paying taxes on 20 billion dollars worth of investment portfolios. The lawyers for the whistle-blower and ex-felon said that by showing such generosity, the IRS was sending a message out to banks around the world that there will be other whistle-blower who will come forward and help stop the tax cheating.
The IRS said that the UBS snitch signed a disclosure waiver allowing them to confirm that he received a significant reward. Where do I sign?
In 2006 Congress rewrote the laws governing whistle-blower rewards which has made this story come about. In order for a snitch to collect, there has to be at least two million dollars in unpaid back taxes, interest and penalties. Snitches can collect up to thirty percent of what they are able to help the US Government recover from fraud.
One Republican senator who helped re-write the law thinks that this will be a boon to collecting billions of dollars from tax cheats. Hmm… Now I get it. The problem with having an unbalanced budget has nothing to do with raising taxes on the wealthy or lowering government handouts. It is all about going after the scofflaws and collecting what is owed.
The government has collected in the past couple of years over $5 billion in lost tax revenue from 35,000 American scofflaws in an amnesty program.
The now very wealthy tattletale was released from jail in August and is in home confinement as this is an early release from an original 40 month sentence. He is seeking a presidential pardon. Heck, why doesn’t he just buy one? Maybe $5 million off the top should do it.
Prosecutors are not happy that the IRS rewarded the whistle-blower. They said he did not come totally clean on his participation in the conspiracy to commit fraud. Naturally, his lawyers reject the notion. One lawyer who makes a living defending snitches says that it is necessary to make rewards available if you want to crack criminal cases. The snitch’s brother chimed in and read a statement on his behalf at a press conference calling the $104 million reward ‘truly gratifying’. Like, whatever.
The statement went on to claim that the whistle-blower single-handedly transformed centuries of illicit Swiss private banking practices, but he paid a huge price for being the only person to have the courage to come forward.
The irony of all this is that the Government feels that the five billion dollars that they have subsequently recovered is a drop in the bucket. They think that by now giving this guy the $104 million, more whistle-blowers will come forward and bring back to this country more of the bacon.
Of course, considering that our national deficit is into the trillions, a billion here or there doesn’t do much to bring down the cost of bacon. You think maybe we can cut down some more of them pork barrel projects?