According to a January 4, 2010 Bloomberg Report, Bradley Birkenfeld, was a key informant in a U.S. investigation of offshore tax evasion aided by US Bancorp (UBS). On Jan. 8, Birkenfeld reported to prison for a 40-month prison term as ordered by U.S. District Judge William Zloch in federal court in Fort Lauderdale, Florida.

“I gave them the biggest tax fraud case in the world,” said the 44-year old Birkenfeld. “I exposed 19,000 international criminals. And I’m going to jail for that?”

Birkenfeld, a former banker with USB AG, pleaded guilty in 2008 to helping California billionaire Igor Olenicoff and hundreds of others evade taxes. Before his sentencing, Birkenfeld cooperated with the Justice Department, a U.S. Senate investigation and the Internal Revenue Service probe of the Zurich-based financial giant, detailing how UBS helped Olenicoff and other rich Americans evade taxes.

Birkenfeld, a former UBS banker, sought a postponement of the term imposed Aug. 21 by, and a new hearing to seek a shorter sentence. He promised to continue cooperating with prosecutors. Zloch denied the request in a one-page order.

“It’s a setback for whistleblowers everywhere,” said Birkenfeld attorney Stephen Kohn, executive director of the National Whistleblowers Center in Washington. “It just undermines the public interest that thousands of major tax cheats all escape any prosecution, and the one person who turned it in gets the longest sentence.”

In February 2009 the court ordered USB to pay $780 million in fines and to hand over data on 250 accounts to avoid prosecution. It agreed in August to turn over data on another 4,450 clients sought by the IRS.

At Birkenfeld’s sentencing on Aug. 21, 2009 the DOJ prosecutor, Kevin Downing stated that the U.S. couldn’t have unraveled the bank’s “massive tax fraud scheme” without his help. Prosecutor Downing recommended a minimum sentence of 30-months for Birkenfeld, since he wasn’t initially truthful about his dealings with Olenicoff.

In an interview on CBS’s “60 Minutes,” Birkenfeld said he didn’t deserve to go to jail when other bankers and clients haven’t. Birkenfeld also seeks a reward from the IRS of up to 30 percent of the taxes collected based on his information.

Olenicoff, who pleaded guilty in 2007 to filing a false tax return, got two years probation and paid $52 million in back taxes, fines and penalties. Last year, six former UBS clients pleaded guilty. While one got 12 months house arrest, none was sentenced to more than three months in prison.

Birkenfeld, who is under house arrest with electronic monitoring in Massachusetts, filed a motion Dec. 26 seeking a delay in his prison term and a hearing on a reduced sentence.

In that motion, Birkenfeld’s lawyers said he has been “ready, willing and able” to provide continued assistance to the government, and prosecutors had not taken him up on the offer.

In the four months after his sentencing, “the government has neither met with Mr. Birkenfeld nor asked him a single question about UBS, Swiss private banking, or any of Mr. Birkenfeld’s former U.S. clients.” His lawyer also spoke once to U.S. authorities on Dec. 14 about Birkenfeld’s former UBS clients, according to the filing.

In a Dec. 7 letter to U.S. Attorney General Eric Holder, Kohn also said that his client told the Senate, the IRS and the Securities and Exchange Commission in 2007 about Olenicoff. “There clearly was a breakdown in communication between DOJ and Mr. Birkenfeld,” Kohn wrote. “There also appears to have been a breakdown in the cooperation and information sharing between various government entities.”

Birkenfeld was indicted with a Liechtenstein investment adviser, Mario Staggl, who was declared a fugitive. Two former UBS bankers, Raoul Weil and Hansreudi Schumacher, and a Swiss lawyer, Matthias Rickenbach, also were indicted in the U.S. and declared fugitives.

The U.S. Department of Justice revealed today the filing of a federal lawsuit against a real estate brokerage doing business as RE/MAX East-West, alleging discrimination on the basis of race and national origin in violation of the Fair Housing Act. RE/MAX East-West is serves Illinois’ DuPage and Cook Counties, including the neighborhoods of Elmhurst, Lombard, Villa Park and Bensenville.

An undercover investigation of RE/MAX East-West conducted by the National Fair Housing Alliance (NFHA) found that the RE/MAX associate’s agents repeatedly steered potential white and Latino homebuyers to areas where their race predominated. According to NFHA, a RE/MAX East-West agent showed a Latino tester three homes in predominantly African-American and Latino areas, homes that were markedly less expensive than those she could afford, and told her that he did not have a lot of time for her. Conversely, the same agent showed a white tester nine homes, the majority of which were in predominantly white areas, and offered to show the tester many more homes in predominantly white neighborhoods as far as a 50 mile drive away.

One real estate agent, John DeJohn, also made illegal comments, NFHA says. He told a white tester, “I don’t care if you are a bigot. If we go to an area and you don’t like it, just let me know. I can’t be a bigot but you can be one.” In addition, DeJohn is said to have informed a white tester that the two homes they viewed together in a predominantly African-American and Latino area were “dumps” and “repos” even though he had told the Latino tester that one of those homes “might be good for you.” And while the white tester received
multiple follow-up calls subsequent to his appointment with the real estate agent, the Latino tester received none.

“That agents of RE/MAX East West were allowed to engage in such blatant discriminatory behavior is outrageous,” says Shanna L. Smith, President and CEO of NFHA. “It is sad to think of how much the community’s residential segregation can be attributed directly to their sales practices.”

The Justice Department’s action comes as a result of a complaint filed by NFHA with the U.S. Department of Housing and Urban Development (HUD). In August, 2005, HUD began an investigation and later found evidence that agents of RE/MAX East-West steered homebuyers based on race and national origin, made discriminatory statements, and treated individuals differently based on their national origin. After HUD issued a charge of discrimination, NFHA filed an election to have the case heard in federal court. As a result, the lawsuit was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division by the Justice Department.

After NFHA filed its HUD complaint in 2005, HUD initiated an investigation based on NFHA’s findings and issued a charge of discrimination on June 9, 2008. The Justice Department then brought suit again RE/MAX East-West and John DeJohn in United States v. S & S GROUP, LTD. d/b/a REMAX EAST-WEST, through its successor in interest, S&W ELMHURST, LLC, also d/b/a REMAX EAST-WEST and JOHN DEJOHN (Case no. 08-CV-4099).

This investigation was part of NFHA’s multi-year, multi-city enforcement project to test for housing discrimination in real estate companies identified by HUD as having previously discriminated during its Housing Discrimination Study.

NFHA’s 12 city investigation found an 87% rate of racial steering and an almost 20% rate of denial for African-Americans and Latinos. The Fair Housing Act prohibits housing discrimination on the basis of race, color, national origin, religion, sex, familial status and disability.