A key government informant and former UBS banker in the U.S. tax evasion case against Swiss bank (UBS AG) was sentenced to more than three years in prison for helping a billionaire hide assets from U.S. tax authorities.

The sentence of Bradley Birkenfeld, by federal Judge William Zloch Bradley Birkenfeld, was tougher than his attorneys and prosecutors anticipated.

Birkenfeld cooperated in the U.S. government tax evasion investigation of UBS, serving as an informant in 2007 for US authorities.  UBS AG has since admitted that its employees helped American clients evade billions of dollars in U.S. taxes.

Prosecutors asked that Birkenfeld’s sentence be reduced to 2 1/2 years from the 5 years he originally faced. His lawyers pleaded  for 5 years probation.

The ex-UBS employee was sentenced for conspiring to defraud the United States by helping a billionaire U.S. real estate developer create sham corporations and entities to hide over $200 million in assets from U.S. tax authorities.

However, he was credited with providing damning information on UBS’s illegal business practices of helping wealthy Americans use their Swiss bank accounts to hide money overseas to evade U.S. taxes.

The sentencing comes just two days after U.S. and Swiss authorities signed a pact in which Switzerland agreed to reveal the names of about 4,450 wealthy American clients of UBS to U.S. tax investigators.

U.S. officials said Birkenfeld’s sentencing would send a powerful message to U.S. tax offenders hiding undisclosed assets in Swiss bank accounts to give themselves up under a voluntary disclosure program.

“To those taxpayers who have illegally hidden their income in foreign bank accounts and to those who have illegally helped clients hide income and assets, today’s sentencing serves as notice: come in and completely come clean,” said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division.

source: Reuters