B. Birkenfeld gets 40 months in the federal slammer despite cooperation. Former UBS private banker Bradley Birkenfeld has been sentenced by a U.S. federal court in Florida to a prison sentence of three years and four months for helping U.S. clients evade U.S. taxes by hiding assets while employed by UBS, according to media reports.

Birkenfeld, who pled guilty in June 2008, faced a sentence of up to five years -- and got a longer sentence than was recommended by federal prosecutors, who urged lenience in part because Birkenfeld has been providing the U.S. government with information in its case againt UBS.

Play ball

Attorneys with the U.S. Department of Justice say Birkenfeld advised U.S. clients on ways to hide assets offshore. More specifically, they say he helped California real-estate tycoon Igor Olenicoff save $7.2 million in taxes by hiding $200 million in assets from the government.

"Today [Birkenfeld] is paying the price for that," IRS chief investigator Eileen Mayer says in a statement.

Olenicoff pled guilty to one count of tax evasion (for the tax year 2002) late in 2007. He was fined, but avoided having to do time.

Dean Zerbe of National Whistleblowers Center says U.S. District Court judge William Zloch's harsh dealing with Birkenfeld is counterproductive, according to a report by Dow Jones.

"It stuns me that the reward for a whistleblower who shined the light on extensive tax fraud and corruption is being sent to jail," Zerbe says in a statement. "Without Mr. Birkenfeld coming forward, the U.S. would not be where it is today in cracking open secret Swiss bank accounts."

Adds Zerbe: "If the U.S. is serious about detecting fraud they have to play ball with the insider -- not throw [him] out of the stadium." In November 2008, a Florida grand jury indicted Raoul Weil, then head of UBS' international wealth-management and business-banking segments, for helping Americans hide something like $20 billion in assets from the U.S. taxman. He has never appeared in court as ordered, and U.S. authorities consider him a fugitive. -FWR

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