Bradley Birkenfield was awarded $104m -- the largest federal whistleblower award for an individual -- when he revealed how UBS used Swiss bank secrecy rules to cheat the Internal Revenue Service, reports Bloomberg News.
Prison term
According to October 2007 court documents, he agreed to pay Schertler & Onorato 12.5 per cent of any IRS whistle-blower award. However, Mr Birken, 47, served 31 months in prison after pleading guilty to conspiracy and he fired Schertler & Onorato in 2008. His new firm says the 12.5 per cent deal is no longer binding.
David Colapinto, of Washington-based Kohn Kohn & Colapinto, wrote to Schertler in December 2010: ‘I hereby request that you confirm in writing that your firm does not assert any financial interest in any whistleblower claim that Mr. Birkenfeld may have related to his allegations against UBS.’
Arbitrator
However, named-partner David Schertler refused to relinquish his firm’s financial claim. Last year, before it was clear that Birkenfeld would ever see a big payday, a federal judge referred the matter to an arbitrator, who has yet to rule.
Then, last month, Stephen Kohn said his firm filed the official form 211 -- titled an ‘Application for Reward for Original Information’ – with the IRS whistleblower office. He maintained ‘Schertlet never filed a 211’.
Disputed claim
Schertler disputes the claim, stating in an e-mail: ‘It is indisputable that Schertler & Onorato communicated directly with the IRS whistleblower office and followed the explicit instructions received from that office on how to properly register Mr Birkenfeld as a whistleblower.’
An IRS spokesman declined to comment on the case.
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