Earlier quoted context omitted.
It's "Swartz". Aaron Swartz. Not "Schwartz".
That's what he said
No, it isn't. (I'm not hitting refresh on these things waiting for the corrections).
I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
31–40 of 106 posts
Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
#32Earlier quoted context omitted.
While it would be unconstitutional in the United States, keep in mind that in certain countries "ex post facto" making certain tax avoidance schemes retroactively unlawful is not unheard of, e.g. BN66 in the UK: https://en.wikipedia.org/wiki/BN66
The IRS sometimes does that. They'll decide in 2008 that some accounting rule is invalid, and oh by the way, that means you owe taxes back to 2002 when you started using it. They can't reverse a rule, but apparently rules can be clarified at any time, so if your loophole hasn't been affirmatively decided, it may retroactively disappear.
Could this happen to the backdoor Roth? I know they've clarified the "mega" backdoor Roth, making it perfectly valid, but AFAIK there hasn't been word on the backdoor Roth.
Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
#33Earlier quoted context omitted.
I'm not. It was not an exchange. He neither knew about the money, nor expected it at the start. I think it would be more precise to say: "Bank exec blew a whistle his company and got 3 years in minimum security prison. By coincidence he also got a lot of money afterwards." Basically unless the whole story the whistleblower reported was fabricated, I don't think there's any situation where I'd be ok with the whistlebl…
What do you mean he didn't know about it? He's a banking exec whistleblowing on tax evasion. The IRS bounty on recoveries is not exactly a secret. Even in the unlikely event that he himself wasn't aware of his prospects when he went in, you'd assume literally the very first thing any competent lawyer would have told him was "you stand to make a hundred million dollars if you go through with it". The thing I like abou…
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Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
#34Earlier quoted context omitted.
What do you mean he didn't know about it? He's a banking exec whistleblowing on tax evasion. The IRS bounty on recoveries is not exactly a secret. Even in the unlikely event that he himself wasn't aware of his prospects when he went in, you'd assume literally the very first thing any competent lawyer would have told him was "you stand to make a hundred million dollars if you go through with it". The thing I like abou…
> (It is, however, extremely important to me that I make clear that I had no idea there was a law like this for a reward when I resigned from UBS in October 2005, as the law passed in December 2006.)
Huh. Fair point. I stand corrected.
Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
#35Earlier quoted context omitted.
You're undervaluing time spent locked up.
I would do 3 years for $100MM. I would do the next three years for $100MM, and they're pretty important years in my family! Someone offer me $100MM to be imprisoned for the next three years; I will put my money where my mouth is on this.
We all knew you were a prostitute for the state, but now we know your upper bound. I suspect your lower bound ia significantly lower.
Lap dog.
Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
#36Earlier quoted context omitted.
Really? That makes no sense to me. Like it being wrong to work part time because you pay less taxes.
It is so much weirder than that. Vanguard's signature benefit is the way its organized: rather that a company that owns and manages funds, it's a collection of funds that own and share the management company. All of the expenses and overhead involved in managing the funds come directly out of the returns of the fund, so the company and its investors have aligned incentives. The problem is that the funds have a client…
Thanks for the link, it was a good read.
Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
#37Aha, but does he need to pay taxes on that $104 million? =)
Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
#38This almost makes some kind of sense. The "whistleblower award" he got was the percentage of recovery the IRS pays as a bounty for intelligence on tax avoidance schemes; it's a portion of the money he actually helped recover for the government. There is a rational case to make for someone being both fully culpable for wrongdoing while still remaining entitled to bounties they've satisfied. For another complicated IRS…
"There is a rational case to make for someone being both fully culpable for wrongdoing while still remaining entitled to bounties they've satisfied."
Not really. Throwing them in jail sends the message that whistleblowing is looked down upon, and thus fewer people will do it. If the whistleblower doesn't have immunity from prosecution, the only way for them really to blow the whistle is to confess to a crime.
Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
#39Earlier quoted context omitted.
> recovery the IRS pays as a bounty for intelligence on tax avoidance scheme Tax evasion . Tax avoidance is legal; evasion is illegal. The one is avoiding taxes by applying the law; the other is breaking the law in some fashion or another.
The line between evasion and avoidance is really a matter of opinion (that we colloquially call 'case law'). It's hard to know what the delta actually is... I would argue that intent isn't really that different between the two.
Intent is the big differentiator. In most jurisdictions, tax evasion is fraud. Fraud gets you in jail. Say you siphon off $1m by doing a deal somewhere, and you don't declare taxes on it. That's evasion.
Avoidance is making sure the proceeds of that deal, for example, end up in a foreign corporate entity with a lower tax rate, while not breaking any laws. Even if you end up paying (close to) nothing, the first will (possibly) land you in jail, the second won't.
The intent to defraud the government is very clear and easy to prove in the first example. In the second, you didn't actually break any laws, and even if the avoidance mechanism wouldn't hold up in court, you didn't actually defraud anyone -> you pay the normal tax rate / maybe some small penalty and some interest / you won't end up in jail.
tldr: don't break the law.. but you can have creative interpretations.
Re: I Won $104M for Blowing the Whistle But Was the Only One Who Went to Jail
#40Earlier quoted context omitted.
> [...] this guy confessed. Yes, he did, but after: > All I asked for in return was a subpoena or immunity. They said no. I wonder realistically how long can you drag this out as a whistleblower? How many times can you say "I'll give you these people if you don't charge me", especially when your document stash is well hidden.
It sort of looks like this bank exec traded 3 years in minimum security prison for more money than any of us could ever use in a lifetime. I'm pretty OK with that precedent!
I'm not. Most people won't be in the position to get that kind of deal.