Report thousands of crimes? Go to prison. Commit thousands of crimes? No problem.

| January 7, 2010 | 9 Replies

Check out this incredible display of hypocrisy vividly demonstrating the raw power of money. It’s a story about Bradley Birkenfeld published at DemocracyNow by Amy Goodman. Birkenfeld was a banker for the Swiss giant UBS. In 2007, he “blew the whistle on the biggest tax evasion scheme in US history.”  He is preparing to head to prison tomorrow to begin serving a forty-month federal sentence.  The written record is clear that Birkenfeld provided inside information to the U.S. Senate, to the IRS and the Justice Department demonstrating that more than 19,000 Americans have been hiding vast amounts of financial assets in secret UBS Swiss accounts.

Image by Laker at Dreamstime.com

Image by Laker at Dreamstime.com (with permission)

None of these tax cheats–they have all cheated the U.S. government out of substantial tax revenue–is spending any time in jail. Who are these tax cheats who hid more than $20 billion from the U.S. government in secret Swiss accounts? Their names have not been disclosed according to Stephen Kohn, Birkenfeld’s attorney:

[T]hey’re all very rich people, very powerful people. They could be judges. They could be senators. They’re all rich. They’re all probably very powerful in their local communities. How guilty were they? . . . Every year they checked a box that was a lie on their tax form that permitted them to hide millions and millions in assets. Each time they checked that box, they committed a felony. So if they were doing it for fifteen, twenty years, these are large felonies.

But wasn’t there a possibility that these wealthy American tax cheats could have gotten caught without Birkenfeld’s efforts?  After all, weren’t these rich tax cheats receiving bank statements from an big overseas bank?  Nope.  That “problem” was taken care of by a special arrangement between the bank and each of its tax cheat customers.  According to Stephen Kohn:

They also had this thing called “mail hold.” The Swiss bank would never send them a letter, so no one could ever track it down. It was personal between that millionaire cheater and the bank. And all of their mail would be held in a secret vault. So when they traveled to Switzerland, they could sit and open all their mail, all their receipts, all their statements, and then shred them when they were done looking at them. In other words, the bank was actively facilitating the fraud, but each client was actively engaged. And these were not small frauds. These were major frauds by millionaires and billionaires. And right now, the American people don’t know who they were. Think of that. Fourteen thousand multimillionaires and, we know, billionaires had illegal accounts for years. They hold positions of authority in the United States. And the Justice Department has essentially given cover to every single one of them.

But wait!  Why is Birkenfeld going to prison?  Well, U.S. authorities have accused him of helping his own billionaire client hide assets–a man named Igor Olenicoff. Olenicoff ended up getting probation while Birkenfeld is going to spend four years in the slammer.

All of this goes to show you that there are some mighty powerful unwritten laws here in the United States. We are a country of two versions of justice, one for the rich and another for the poor. What kind of justice do the poor get? Consider another example: 750,000 people are arrested for possession of marijuana every year, the equivalent to the entire population of South Dakota. At the same time, large monied pharmaceutical companies crank out expensive drugs that mimic virtually every street drug out there, perfectly legally and in many cases financed by the U.S. Medicare system.

Yes, there are two versions of justice here in the U.S. It reminds me of that famous quote by Anatole France:

The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.

Anyone, rich or poor, who wants to cheat the U.S. government by stashing their possessions in an overseas bank account is welcome to do so. But if you cheat the government out of food stamps, God help you. Anyone who wants to produce mind-altering medication by starting their own pharmaceutical company is allowed to do so under the law. But if you grow marijuana at home, you’ll face the full weight of the law.

Share

Tags: , , , , ,

Category: Corruption, hypocrisy, law and order, Politics

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich and his wife, Anne Jay, live in the Shaw Neighborhood of St. Louis, Missouri, where they are raising their two extraordinary daughters.

Comments (9)

Trackback URL | Comments RSS Feed

  1. Erich Vieth says:

    To help remedy this miscarriage of justice, you can sign a Petition directed to The President of the United States, your elected legislative representatives and the U.S. Attorney General by visiting the National Whistleblowers Center http://www.whistleblowers.org/ and clicking on this link: http://capwiz.com/whistleblowers/issues/alert/?al

  2. Jay Fraz says:

    Why do I think that these are the people funding free market think tanks that are complaining about the deficit, all the while refusing to contribute to reducing it.

    A word you will never hear from this crowd is the NEED for self-sacrifice.

  3. Erich Vieth says:

    Here's a fact sheet regarding Bradley Birkenfeld. If there were any justice in Washington D.C., Birkenfeld would be released immediately and 10,000 or more rich tax cheats would be thrown in the slammer.

    http://www.whistleblowers.org/index.php?option=co

  4. Erich Vieth says:

    I just wrote this email to President Obama:

    Please grant clemency to Bradley Birkenfeld. It is shameful that he has spent any time in prison, while thousands of rich tax cheats and employees of UBS America skate.

    For more, see:

    http://dangerousintersection.org/2010/01/07/repor

    and

    http://www.democracynow.org/2010/4/15/ubs

    Here's more from today's version of DemocracyNow.org:

    A former banker for the Swiss giant UBS [who] blew the whistle on the biggest tax evasion scheme in US history is asking President Obama today for clemency. The clemency request is being filed to coincide with Tax Day, the day US income tax returns are due for all of us.

    In January, Bradley Birkenfeld began serving a forty-month sentence despite playing a key role in uncovering the bank scandal. Birkenfeld first came forward to US authorities in 2007 and began providing inside information on how UBS was helping thousands of Americans evade taxes by hiding billions of dollars in secret Swiss accounts.

    Mr. Birkenfeld's lawyer told DemocracyNow's Amy Goodman that the part of the scandal that is currently known is only the tip of the iceberg:

    The problem with these secret accounts is a lot worse than just US taxpayers losing money. These accounts are used by corrupt politicians to put their bribe money. They’re used by officials in developing countries to put illegally stolen development funds, money stolen from food programs, education programs. Who puts money into these illegal accounts? How are they misused? The scandal exposed by Mr. Birkenfeld—and keep in mind, he was the first major banker ever in world history to take information from these top-secret foreign accounts and give them to the government for prosecution. How was he treated? That’s the message.

    This is a major news story in Switzerland. This is a major news story throughout the entire banking community. This is being watched. I was interviewed by Swiss TV yesterday. The people who manage the secret bank accounts are watching Birkenfeld with a magnifying glass. They want to know how has the United States treated him. And it’s simple."

    http://www.democracynow.org/2010/4/15/ubs

  5. Tim Hogan says:

    Erich, I read your comment and went straight to WhiteHouse.gov and asked President Obama to grant clemency. There's an option for getting a reply, I hit the button. Perhaps more of us could do this for Mr. Birkenfeld.

  6. Erich Vieth says:

    “Switzerland is set to partially meet a U.S. ultimatum and deliver an estimate of the amount of assets held by U.S. residents in secret accounts at Swiss banks, possibly up to $30 billion, a newspaper reported on Tuesday.”

    http://www.reuters.com/article/2011/09/06/switzerland-usa-tax-idUSL5E7K609P20110906

  7. Erich Vieth says:

    Swiss banks will probably settle a sweeping U.S. probe of offshore tax evasion by paying billions of dollars and handing over names of thousands of Americans who have secret accounts, according to two people familiar with the matter.

    http://www.bloomberg.com/news/2011-10-24/swiss-banks-said-ready-to-pay-billions-disclose-customer-names.html

  8. Erich Vieth says:

    The Romney tax returns showed that he and his family held investments abroad in such places as Luxembourg, Ireland and the Cayman Islands. At least one of those investments, an account at the Swiss Bank UBS held in a blind trust for Romney’s wife, would have triggered the FBAR requirement.

    The Swiss bank account and other offshore holdings were left out of a separate, public financial disclosure required of presidential candidates that Romney filed last year with the Office of Government Ethics. The Romney campaign has said it will amend the ethics disclosure.

    http://www.washingtonpost.com/business/economy/romney-campaign-says-it-has-filed-paperwork-related-to-offshore-holdings/2012/01/27/gIQADJt7VQ_story.html

Leave a Reply


Notify me of followup comments via e-mail. You can also subscribe without commenting.