How to Sign In
Business Law Blog
cancel
Showing results for 
Search instead for 
Did you mean: 
X
Kevin Costner and Estee Lauder Chairman Accused of Tax Evasion
Contributor
54 Views
0 Comments

Bradley Birkenfeld, a whistleblower who worked for UBS (bank in Switzerland), told authorities that the bank had thousands of Americans who held secret, numbered bank accounts with his employer as part of a tax-evasion scheme. James V. Grimaldi, "Suit Claims Tax-Evasion Schemes," Wall Street Journal, May 10, 2019, p. A5. Mr. Birkenfeld collected the largest whistleblower payment for his disclosures ($104 million) under the Whistleblower Protection Act, an amount received after Mr. Birkenfeld served 2.5 years in prison for his role at UBS in hiding millions of dollars for American clients. 

 

Following the end of his probationary period after his release, Mr. Birkenfeld wrote a book, "Lucifer's Banker," that named names of the clients, including Kevin Costner and the chairman emeritus of Estee Lauder, Leonard Lauder. In the vetting of the book, lawyers for Mr. Costner explained that Mr. Costner never had such an account at UBS, and that Mr. Lauder had accounts but had disclosed them to the IRS. 

 

The paragraph at issue in the book was:

 

"I gave [my attorneys]client names and account holdings that made their eyes pop."  [Then listed in the paragraph were Mr. Costner, Leonard Lauder, and his wife, Estee Lauder (now deceased)).

 

Following the denials, Mr. Birkenfeld's publisher, Greenleaf Book Group Press destroyed tens of thousands of copies of the book and required Mr. Birkenfeld to pay the costs for the literary attorney who vetted the book.  

 

Mr. Birkenfeld has now filed suit against Mr. Costner and Mr. Lauder accusing them of contract interference with his publisher by falsely denying that they were clients of UBS.  Mr. Birkenfeld is seeking damages from the two for the denials that resulted in the publisher removing the names and decreased the news worthiness of the book, resulting in substantial losses of earnings from the book.  He also had to pay for an additional $3 million in literary insurance, an increase of $2 million in coverage over this original $1 million and is asking for that amount in damages.

 

The case is an interesting one because it is based on a publisher's fear of libel in a book, but is grounded in contract and tort law with the alleged intentional interference with Mr. Birkenfeld's contract. Lawyers for Mr. Costner and Mr. Lauder continue to deny the allegations and Mr. Birkenfeld will need to establish the truthfulness of is original statements in the book and, as a result, the bad faith of the denials. 

 

DISCUSSION STARTERS

 

  1. Discuss the role of whistleblowers.
  2. Mr. Birkenfeld was the only white collar criminal sentenced to prison for the tax evasion scheme at USB.  Why?
  3. How would you go about proving whether Mr. Costner and Mr. Lauder has bank accounts at UBS?