WASHINGTON (CN) - The man who blew the whistle on UBS Bank, getting a $104 million award and costing the bank $780 million for tax evasion, has sued his attorneys, claiming he went to prison because they failed to secure whistleblower protection for him.
Bradley Birkenfeld sued the law firm Schertler Onorato, and attorneys David Schertler, Danny Onorato, David Dickieson and Peter Taylor, in Superior Court.
Birkenfeld, of Massachusetts native, says he was a senior client adviser for the Swiss bank, but resigned in 2005 and filed a whistleblower complaint with UBS. He hired Schertler Onorato to represent him, but attorneys bungled the case by not filing forms with the IRS, not advising him of his impending indictment, then refusing to turn over its files to his new attorneys during his criminal trial, Birkenfeld says in the complaint.
He claims the firm falsely held itself out as experienced and knowledgeable about federal whistleblower laws and procedures, but had "very limited experience in the area of obtaining compensation and immunity for whistleblowers under federal law."
Among their many shortcomings, Birkenfeld says, were failing to follow IRS whistleblower procedures by not submitting IRS whistleblower forms that would have made the information he gave confidential.
Instead, he says, his lawyers made him vulnerable to an FBI investigation that led to a federal indictment, conviction and 40-month prison sentence. He also was fined $30,000.
Birkenfeld, who is scheduled to be released and put on probation on Nov. 29, was also given a $104 million award by the IRS for his whistleblowing.
But in his complaint, Birkenfeld says the Schertler Onorato attorneys let him give up information without immunity from the FBI or from a U.S. Senate committee. The Senate investigated high-powered UBS clients such as Abdulaziz Abbas, who used his UBS accounts to conceal enormous profits made through illegal oil sales from Saddam Hussein's regime; and Russian billionaire Igor Olenicoff, who pleaded guilty to failing to report $200 million in overseas assets to the U.S. government.
The complaint states: "As a direct and proximate results of defendants' breaches of their duty of care, as aforesaid, plaintiff has incurred substantial damages, including by not limited to:
"a. His arrest, indictment, conviction and sentencing to 40 months in prison, a $30,000 fine and three years' probation, all of which could have been avoided if defendants had properly represented him;
"b. At least $7,800,000 to $15,600,000 more than he actually received as his whistleblower's award; ..."
He also claims that the firm's unwillingness to pursue his request to unfreeze an account to pay his legal fees cost him $500,000 in the 2008 stock market collapse.
Birkenfeld says that after he fired the Schertler Onorato attorneys, they withheld crucial files from his new lawyers, which contained information that could have prevented his conviction.
He claims those files could have brought a larger reward from the IRS, but without their proof that he had given up Olenicoff, his reward was cut by as much as $15.6 million.
Birkenfeld seeks $60 million for legal malpractice, breach of fiduciary duty and unlawful trade. He also wants treble and punitive damages, and attorneys' fees.
He is represented by Christopher Hoge, with Crowley Hoge.