The whistleblower in a landmark fraud case against Swiss bank UBS is loving his new lifestyle at an undisclosed location in New Hampshire and hopes to become a productive citizen as he completes his federal sentence, his attorney says.

“He's very pleased to be there,” said Dean A. Zerbe, attorney for Bradley Birkenfeld. “He wants to be very active in the community and very active in charitable work. He wants to be a good citizen and someone who brings something to the state.”

Birkenfeld is currently confined to an estate where his attorney says he does gardening and other odd jobs. He has made headlines around the world, and sent the Swiss banking system into a panic, since a news conference last week at which his attorneys announced a record-setting $104 million reward from U.S. authorities in a strong show of support for the Internal Revenue Service's controversial whistleblower program.

His revelations about UBS, his former employer, caused alarm among Americans who have used the Swiss banking system to avoid taxes. The IRS investigation triggered by Birkenfeld helped the U.S. Treasury to recover billions in unpaid taxes. In addition, UBS in 2009 entered into a deferred prosecution agreement and paid $780 million in fines, penalties, interest and restitution to settle charges that it helped 17,000 U.S. clients hide $20 billion. U.S. authorities are still investigating other Swiss banks.

But Birkenfeld was jailed after the government said he withheld other information about helping wealthy Americans hide money in secret Swiss accounts. He pleaded guilty in 2008 to one count of conspiracy to defraud the United States, a felony, and was given a 40-month sentence. He was released in August, at first to a halfway house in New Hampshire. Within weeks he was in home confinement, according to Zerbe, an attorney with the National Whistle Blowers Center in Washington, D.C.

New Hampshire was a natural choice for Birkenfeld, said Zerbe in a telephone interview on Monday.

“He's from the New England area, and he has a number of family and friends in the area,” Zerbe said. “And I think he wanted to be away, in terms of being a little outside of the world. He liked the quietness of New Hampshire and being able to have time to be with himself and close family, and not feel the world's rushing in on him.”

$104 million award

The National Whistle Blowers Center describes Birkenfeld as “a tall, well-built man of 43. His manner is anything but cloak-and-dagger. The son of a Boston brain surgeon, he grew up in the city's privileged southern suburbs. He began his banking career at State Street, the local lender, before moving into international wealth management at Credit Suisse, Barclays and UBS.”

Birkenfeld spent much of the past 15 years in Switzerland, where the center says, “he burnished his upper middle class U.S. credentials with the charm and savvy of a pukka Swiss private banker. He worked in Geneva as one of about 60 UBS private bankers in three Swiss cities, providing services for clients that ranged from advice on buying jewelry and art, to tricks such as squeezing diamonds into toothpaste tubes so as to move them without detection.”

While some criticized the large cash award to a convicted felon, others came to Birkenfeld's defense, pointing out that the IRS set up the whistleblower program with exactly this kind of outcome in mind. Birkenfeld is set to complete his sentence and end his home confinement in late November.

At that time, he should be a free man, with a good portion of the $104 million still in his possession, even after taxes and legal fees.

Zerbe said Birkenfeld has settled into his new home, has a library card, and is adapting to the conditions of house arrest. “He has to report in to authorities, but he has a small house, can go get groceries, get lunch, do his work,” he added.

Zerbe couldn't comment on whether Birkenfeld was working for acquaintances or strangers, but said he enjoys the work, “doing gardening, handyman work, just an all-round guy for the estate,” he said.

Billions collected

After last week's news conference, Sen. Chuck Grassley, R-Iowa, said as a result of the information provided by Birkenfeld, “billions of dollars in taxes owed will be collected that otherwise would not have been paid.”

Grassley has in the past criticized the IRS whistleblower program, which gathers information from people who want to alert the tax-collecting agency to misconduct. Grassley wrote a bill in 2006 that overhauled the program.

Last year, the whistleblower program collected only $48 million in tax revenues, down from $464 million in fiscal year 2010. New whistleblower cases were down, as well, with some lawyers complaining that the program office was slow and uncooperative with whistleblowers.

Grassley said the Birkenfeld case showed the whistleblower program can be effective, but he criticized the IRS for taking nearly four years to settle. “If the IRS is serious about encouraging future whistleblowers, it needs to continue to honor the spirit and intent of the law and issue awards in a timely manner,” he said.

The IRS settlement with Birkenfeld was described as "the largest whistleblower reward issued to a single individual," by his attorneys.

“He provided $5 billion in benefit to the taxpayers of this country, including to all the good taxpayers of New Hampshire,” Zerbe said. I think anyone who knew Brad or dealt with him would know this is a good fellow and is going to be a good fellow to work with.”

Backlash possible?

The Birkenfeld case could prompt a backlash from the financial industry and its U.S. allies, said Solomon Wisenberg, a partner at the law firm Barnes & Thornburg. “The response could be for the friends of big business in Congress to argue this is an outrage that someone involved in this could get this kind of award,” said Wisenberg, who is based in the firm's Washington, D.C. office.

“But if ever there was anyone who deserved a big reward, it was this guy. He's done something no one's ever done before, essentially brought the Swiss banks to their knees,” he said.

For now, the man who brought down the Swiss banking system is enjoying the approaching fall season somewhere in New Hampshire. “I know he's got a lot of folks that have been helping him out up there,” said Zerbe, “and he's very happy to be there.”

Material from Reuters News Service was used in this report.

dsolomon@unionleader.com