How to Avoid Unintended Liability When Making a Whistleblower Disclosure

The potential civil and criminal liability of whistleblowers was discussed at the Offshore Alert Conference in Miami, Florida earlier this week.  Attention was again directed towards the pitfalls of how Bradley Birkenfeld’s disclosure to the government about United States taxpayers with secret Swiss bank accounts at UBS was handled.  Mr. Birkenfeld’s story has been a cautionary tale for those considering reporting violations of internal revenue laws where the would-be whistleblower may have civil or criminal liability.  Often whistleblowers have intimate knowledge of tax underpayments due to their relationship with the taxpayer or their participation in the transaction, which can lead to civil and or criminal liability for the informant. 

“Whistleblowers must engage knowledgeable professionals familiar with the inner workings of the Justice Department before they unwittingly volunteer potentially incriminating evidence to the government,” said Jeffrey H. Sloman, attorney with The Ferraro Law Firm.  Mr. Sloman was the United States Attorney for the Southern District of Florida in 2009, when UBS settled the criminal charges against it in his district.  It is rare that the whistleblower will become the target of an investigation because of their disclosure; but if they have any doubt as to their potential liability, they should consult with an attorney prior to making the disclosure.