Ex-UBS banker turned tax evasion informant gets 40-month sentence

— -- The former UBS banker who gave federal prosecutors inside information about the Swiss banking giant's business helping wealthy Americans hide assets offshore was sentenced to 40 months in prison Friday for his own role in the once-secret scheme.

U.S. District Judge William Zloch in Fort Lauderdale federal court imposed a sentence ten months longer than the reduced term prosecutors had recommended. But the punishment was well short of the five-year maximum term the 44-year-old U.S. citizen could have received for his guilty plea on a charge of conspiring to defraud the U.S.

Prosecutors had recommended leniency based on the road map Birkenfeld provided to what they described in court papers as a "multi-billion scheme to defraud the United States" perpetrated by UBS and its well-heeled clientele. Birkenfeld's attorneys had urged a sentence of five years' probation with no prison time.

Birkenfeld told Zloch his goal was to expose wrongdoing at UBS and the Swiss banking system.

According to his defense team, Birkenfeld in 2001 began working in private banking at a UBS office in Geneva where he primarily handled American clients. By 2005, he "realized that UBS and he were acting improperly" by helping U.S. customers evade federal taxes, Birkenfeld's lawyers wrote in a sentencing recommendation earlier this week.

He first took his concerns to UBS superiors, but got little response, his attorneys wrote. After resigning in October 2005, Birkenfeld became tangled in a dispute over a bonus award he charged UBS refused to honor.

In 2007, while the dispute was being resolved, Birkenfeld contacted the IRS and Department of Justice with an offer to provide information about UBS' cross-border banking business.

He ultimately supplied documents and other evidence that showed UBS had repeatedly sent bankers on secret trips to the U.S. during which they helped scores of clients use offshore accounts to hide assets and income without paying taxes.