U.S. Given A Look at Swiss Bank Accounts

"When all is said and done, the full nature and scope of Brad Birkenfeld's contribution to the investigation will be very clear for all to see," David E. Meier, an attorney for Birkenfeld, said by e-mail recently, declining to comment further.

Although Birkenfeld may be the only UBS insider whose role in U.S. investigations is a matter of public record, he is not the only person with inside knowledge assisting the Justice Department's criminal investigation, the source close to the case said.

Based partly on Birkenfeld's description of UBS's business practices, Senate investigators have reported that UBS might have violated U.S. banking and securities laws.

Testifying at a Senate hearing in July, Mark Branson, a senior UBS executive, said it appeared that "misconduct occurred" in the bank's cross-border business with U.S. customers.

"We did have detailed written policies that prohibited our employees from engaging in some of the conduct that our internal investigation has uncovered, such as assisting in the creation of sham offshore companies to defraud tax authorities," Branson testified. "While our own review is not complete, it is apparent now that our controls and our supervision were inadequate. We are committed to taking both corrective and disciplinary measures."

The 70 or so names turned over by the Swiss in recent months are far from a full disclosure. According to a July report by the staff of the Senate's Permanent Subcommittee on Investigations, UBS told Senate investigators that about 19,000 Americans held undeclared accounts with the bank in Switzerland.

The secrecy of foreign accounts has taken a series of hits since late last year. First, Igor M. Olenicoff, a California real estate billionaire and client of UBS, pleaded guilty to one count of filing a false tax return. Then tax authorities from multiple countries, including the IRS, began enforcement actions against many clients of Liechtenstein's LGT Bank based on confidential information provided by a former LGT employee.

Then, in June, Birkenfeld pleaded guilty to helping Olenicoff conceal $200 million and evade $7.2 million in taxes.

The U.S. government has been trying to pry loose information about secret bank accounts by offering whistleblowers up to 30 percent of any money they help the IRS recover.

"We've seen a lot more whistleblowers walking in with lists of names" of people with offshore accounts, Commissioner of Internal Revenue Douglas Shulman said in an interview Wednesday. "And we've got a lot of names that we're combing through and will be pursuing aggressively."

Shulman was not referring to any particular bank.

"I think any individual who's using foreign bank accounts to hide assets and not pay taxes would be well advised to be nervous and would be well advised to come in," Shulman said.

In a separate development, Liechtenstein's embassy in Washington said recently that the tiny European principality has concluded negotiations on an agreement to exchange tax information.

"This agreement provides for information exchange where suspicion arises under US law concerning tax offenses committed by US taxpayers with assets in Liechtenstein," the embassy said in a statement.

"Privacy will continue to be protected under this agreement," the statement said.