[ Legal Week ] Shearman & Sterling is set to lose its only two Brussels-based partners to U.S. rival Arnold & Porter.

Shearman’s local office head Annette Schild is joining Arnold & Porter in the Belgian capital, along with fellow partner Silvio Cappellari and counsel Stephanie Birmanns. All three lawyers focus on competition and antitrust and have advised high-profile clients including Arriva, BASF, Siemens and Novartis.

The departures will leave Shearman without a single full-time partner in Brussels. However, the firm said it intends to maintain its competition law practice in the city, and has moved to appoint German co-head Hans Juergen Meyer-Lindemann as the office’s new managing partner.

Meyer-Lindemann will now split his time between Shearman’s Düsseldorf and Brussels bases, while London-based competition law partner Matthew Readings will also support the Brussels operation.

Shearman senior partner Rohan Weerasinghe said: “We are fully committed to providing our clients with comprehensive European competition law coverage through a strong team of competition law practitioners in our London, Düsseldorf and Paris offices, as well as in Brussels.”

Arnold & Porter’s Brussels managing partner and European competition practice head Marleen Van Kerckhove — who joined the U.S. firm from Clifford Chance in 2003 to launch the office — said the hires came in response to a need for a larger Brussels-based competition practice.

She told Legal Week: “The decision to combine our practices was based on a common desire between me and Annette Schild to be part of a larger competition practice in order to better handle our client base. The team will strengthen our office by headcount as well as through added experience and it also gives us access to clients and sectors where we have not previously advised.”

Arnold & Porter’s Brussels office currently has eight lawyers, including two partners and two counsel. The European competition practice also includes London-based partners Tim Frazer and Susan Hinchliffe.

[ The American Lawyer ] The vitriol continues to grow over a Scottish justice minister’s controversial decision to grant early release to convicted Libyan terrorist Abdelbaset al-Megrahi for his role in the bombing of Pan Am Flight 103. Libyan leader Muammar el-Qaddafi’s plan to pitch his Sahara-sized tent in New Jersey — the home state of several Lockerbie victims — after he addresses the U.N. General Assembly in September is adding to the tension.

One lawyer who’s tangled with the Libyan government in a U.S. courtroom says he understands why the tumult won’t die down.

“Lockerbie families have been frustrated for years,” says Crowell & Moring international dispute resolution practice co-chair Stuart Newberger. “This is the culmination.”

Last year Newberger represented the families of victims of the bombing of UTA Flight 772 over Africa in 1989 in a case stemming from that incident. (The UTA bombing occurred just nine months after the Lockerbie massacre.) Newberger won a $6 billion judgment against Libya, payable to the relatives of the seven U.S. victims of the downing of the DC-10 jetliner over Niger.

“Everyone has heard about Lockerbie, which is certainly a tragedy, but very few know about the UTA case,” Newberger says. In 1989 a French criminal court convicted six Libyan officials in absentia for their role in the UTA bombing. The six remain in Libya, which has refused to extradite them to France. (Libya is believed to have bombed UTA 772 as revenge for its defeat by French-backed Chadian forces in the 1987 Toyota War.)

Libya eventually came to an agreement with France in 2003 to compensate victims of the airline attack in return for economic considerations. But families of the seven U.S. victims represented by Newberger refused to take part in the out-of-court settlement.

Newberger says the opportunity his clients had to confront Libya in a U.S. court and to hold Qaddafi’s government accountable for liability and damages was essential to achieving closure and putting the matter behind them.

“Families need to have a process,” the lawyer says. “Having not gone through that, the [release of Abdelbaset al-Megrahi] is like poking a stick in their eye. I feel for them.” Still, Newberger says, reflecting on the $6 billion judgment awarded to his clients, “No amount of money can bring back their loved ones.”

But the seven families of U.S. victims on UTA 772, including that of Bonnie Pugh, the wife of the former U.S. ambassador to Chad, will never receive the full $6 billion given a settlement the U.S. reached with Libya last year.

In October, Libya agreed to pay $1.5 billion into a settlement fund to compensate the American victims of UTA 772, as well as the 1986 bombing of a Berlin discotheque that killed two American servicemen. The fund also includes the remaining 20 percent due from a $2.7 billion Lockerbie settlement in 2002. (Another $300 million from the fund will go to compensate the Libyan victims of the U.S. bombings of Tripoli and Benghazi in 1986.)

Newberger says the bulk of the payments have already been made to his clients through the U.S. Department of State. The U.S. Department of Justice’s Foreign Claims Settlement Commission still has some determinations to make over final disbursements.

The Justice Department confirmed this week that a criminal indictment remains open against Lockerbie bomber Abdelbaset al-Megrahi and other unnamed Libyan conspirators.

[ The American Lawyer ] Freshfields Bruckhaus Deringer and four leading firms from India and South Africa have landed roles in negotiations that could bring about India’s largest-ever M&A deal. Bharti Airtel and MTN Group are getting closer to announcing a long-awaited transaction creating the world’s largest international telecom provider.

The Am Law Daily began tracking the proposed deal back in May when talks between New Delhi-based Bharti and Johannesburg-based MTN started heating up over a shareholder swap that would precede a merger worth an estimated $23 billion.

On Thursday The Wall Street Journal reported that the two sides were close to an agreement that would see Bharti offer shareholders $13.1 billion for a 49 percent stake in MTN. At the moment, the lawyers involved in the ongoing negotiations aren’t talking. (E-mails to several lawyers named in this story — sent after business hours, due to the difference in time zones — weren’t returned by press time.)

MTN, which provides cell phone services to more than 80 million subscribers in the Middle East and Africa, has turned to a team of lawyers from Freshfields, Indian firm Platinum Partners and South African firm Webber Wentzel.

As previously reported by The Am Law Daily, Freshfields London-based corporate partners Simon Weller and Bruce Embley and Indian corporate head Pratap Amin — who was recruited by Freshfields from Denton Wilde Sapte in 1998 — are advising MTN in the matter. A team from 280-lawyer Webber Wentzel, which has offices in Johannesburg, Cape Town and London, is serving as MTN’s local counsel.

Both firms advised MTN on the company’s $5.5 billion acquisition of Dubai-based Investcom in 2006.

Legally India reports that Karam Daulet-Singh, co-founding partner of India’s Platinum Partners, is leading MTN’s legal team from Delhi. Legally India notes that Freshfields and Platinum do not have a “best friends” relationship, but have worked with one another on large deals in the past.

Across the table advising Bharti are New Delhi-based corporate partners Ajay Bahl and Gautam Saha from India’s AZB & Partners, reports Legally India. Last month AZB acquired the Bangalore firm of Anup S. Shah, which brought the firm’s head count to 19 partners and 240 legal professionals in Bangalore, New Delhi and Mumbai.

Earlier this year AZB completed a best friends agreement with Clifford Chance in India. A Clifford Chance spokesman tells The Am Law Daily that so far the Magic Circle firm has not yet been brought in to advise on the merger talks between Bharti and MTN.

South African counsel to MTN is being provided by Ezra Davids, head of the corporate department at 300-lawyer Bowman Gilfillan in Johannesburg.

According to Indian deal data, if a transaction between Bharti and MTN is completed, it would be the largest Indian M&A deal since Tata Steel bought British steelmaker Corus for $12 billion in 2007.

That deal saw Herbert Smith, Stibbe and Arnold & Porter advise Tata Steel, with Corus turning to Slaughter and May and Shearman & Sterling.

[ The National Law Journal ] A federal judge in Washington, D.C., is questioning the government’s motivation behind moving to dismiss the drug trafficking conspiracy charge against an international pharmaceutical businessman who is wanted for prosecution Mexico.

At a status hearing Tuesday in the government’s case against Zhenli Ye Gon, Judge Emmet Sullivan of U.S. District Court for the District of Columbia directed Justice Department prosecutors to address in a brief how the government may benefit from dismissal of the case without prejudice.

Government lawyers in late June moved to dismiss the indictment against Ye Gon without prejudice, citing evidentiary concerns and the fact Mexico intends to prosecute Ye Gon on charges that include organized crime, drug and firearms violations. The Ye Gon case has the attention of Mexico’s top prosecutors, Justice lawyers say. Ye Gon’s lawyers say the government belatedly turned over favorable evidence to the defense — evidence that the lawyers say undercuts the government’s case.

In court Tuesday, Sullivan noted that a judge in Mexico has refused to provide certain evidence to Justice Department lawyers to aid the prosecution in the United States and to fulfill obligations to turn over evidence to Ye Gon’s defense lawyers. That Mexico has not been fully cooperative is a “significant point, and I’ve heard that more than once,” Sullivan said in court.

Sullivan questioned whether the Justice Department plans to refile charges against Ye Gon in Washington following the prosecution of Ye Gon in Mexico. Ye Gon’s lawyers, Manuel Retureta and A. Eduardo Balarezo, are fighting extradition. A hearing is scheduled for next month before Magistrate Judge John Facciola in Washington. Ye Gon’s lawyers say Ye Gon cannot get a fair trial in Mexico. Ye Gon, who was in court Tuesday, is seeking asylum in the United States. He has been jailed without bond since his arrest in Maryland in July 2007.

Sullivan had been scheduled to hear the government’s motion to dismiss Wednesday, but he has postponed the hearing. The judge today directed the opposing lawyers to address what impact, if any, a recent American Bar Association ethics opinion has on the position of the parties n the Ye Gon case. The opinion, published in July, addresses prosecution disclosure obligations. A copy of the opinion is here.

Sullivan said he will hear the government’s motion to dismiss the indictment Sept. 14. The judge has said he will dismiss the charge against Ye Gon. The big issue is whether he tosses the case with prejudice. Government lawyers want the case dismissed without prejudice, saying that if Mexico is unable or unwilling to prosecute Ye Gon he can be returned to Washington to face prosecution here.

Sullivan asked Paul O’Brien, chief of the Justice Department’s Narcotics and Dangerous Drug Section, whether the government would consent to dismissing the case with prejudice. “Your honor, I’ll take a look at it,” O’Brien said. But O’Brien said his concern is that the Justice Department in no way believes there has been any misconduct in the case and the department does not believe prosecutors violated disclosure obligations.

[ The American Lawyer ] Two years ago, lawyers in Pakistan inspired the world with their protests against former President Pervez Musharraf’s suspension of Pakistani Supreme Court Chief Justice Iftikhar Mohammed Chaudhry. The persistent street demonstrations by thousands of black suit-clad lawyers, braving beatings and arrests, were widely credited with rallying opposition to Musharraf’s growing authoritarianism and contributing to his 2008 ouster.

But are the lawyers now becoming a public menace?

According to a recent BBC report, lawyers in Lahore, the city whose bar group led the protest movement, have been accused of carrying out some 18 assaults in the past month.

“Lawyers used to be a very gentle people,” superintendent Sohail Sukhera of the Lahore police force told the BBC. “They were polite and educated. But the last couple of years have converted them into an absolutely different commodity.

“In one case, lawyers broke the leg of a police inspector,” Sukhera continued. “Others have had their skulls exposed when lawyers have hit them on the head with stones or chair legs. It’s really uncalled for.”

What’s behind the outbursts? It’s not clear, but Sukhera theorized that some lawyers developed a “mob mentality” during the protest movement and now regard themselves as “above the law.”

A video widely circulated in Pakistan shows three alleged lawyers, dressed in their characteristic black suits and ties, manhandling and punching a police officer.

The officer in the video, Fakir Muhammed said: “I tried to reason with them but they didn’t listen and I still have no idea what it was about. I feel so insulted. My whole department looks at me as the guy that got beaten up. It’s humiliating.”

Sukhera told the BBC that dealing with the lawyers is consuming resources that could be used to fight terrorism.

But Lahore lawyer Raja Hanif told the BBC the Pakistani media is blowing up the incidents to make the lawyers’ movement look bad. He points the finger at Musharraf supporters still bitter over the protests’ success.

“But I believe the people of Pakistan understand we fought for truth,” Mr Hanif said. “We fought for the rule of law over two years, and we achieved something great.”

Justice Tariq Mahmood, a leader of the protest movement, said those lawyers involved in assaults should be dealt with harshly.

“Yes, we did fight for the rule of law,” said Mahmood, “but if you have earned so much respect, and then instead of being a role model, you involve yourself in these incidents of violence, then what message is being passed to the general public?”

“What is happening now is not what we fought so hard for and not what we made such sacrifices for,” he added.

[ The American Lawyer ] The bombing of Pan Am Flight 103 over Lockerbie, Scotland in 1988 has a long legal history, most recently dredged up by the “compassionate” release Friday of a Libyan convicted of planning the attack who is reportedly terminally ill with cancer.

The uproar surrounding Scottish Justice Secretary Kenny MacAskill’s decision to release Abdelbaset al-Megrahi to allow him to die in his native country has only intensified in recent days.

Last week FBI director Robert Mueller sent a scathing letter to MacAskill calling the action a “mockery of the rule of law.” On Monday the Scottish parliament hauled MacAskill before the governing body to explain his decision.

In 2002 the families of the 270 people aboard Pan Am Flight 103 settled their civil case against the Libyan government for $2.7 billion, or about $10 million per family. But the release of Megrahi to a hero’s reception in Libya has reopened old wounds — a co-defendant of Megrahi was acquitted in 2001 — and revived painful memories.

We talked to four people entangled in the Lockerbie legal web to discuss the impact of Justice MacAskill’s decision: a former government attorney who heads the Pan Am Flight 103 victims’ group, an ex-Sonnenschein Nath & Rosenthal lawyer who helped craft the $2.7 billion settlement, a White & Case lawyer who represents Libya in U.S. litigation, and those who knew a former Covington & Burling lawyer turned Nazi hunter who was among the 270 who died on that fateful night.

Frank Duggan, Victims of Pan Am Flight 103

Frank Duggan, a semi-retired lawyer and former chairman of the National Mediation Board, has been helping the relatives of Lockerbie victims for more than 20 years.

In the early 1990s, President George H.W. Bush named Duggan to a presidential commission on aviation security and terrorism that studied the Lockerbie bombing. Duggan eventually became president of the Victims of Pan Am Flight 103, a group that represents the families of American victims seeking to uncover the truth behind the Dec. 21 attack.

“Of all the things that I’ve done in government, this has been the most gut wrenching, but also the most rewarding,” says Duggan, who also served as assistant secretary of labor in the Reagan administration.

To say he’s furious by MacAskill’s decision to release Megrahi is an understatement.

“As a first generation Irish-American, I’ve always had a genetic distrust of the British, but I’ve always trusted the Scots,” Duggan says. “This is just obscene.”

What irks Duggan the most is the fact that relatives of Lockerbie victims were given their first opportunity to make victim impact statements this year — when the issue of Megrahi’s appeal came before MacAskill.

A few weeks ago, Duggan says 15 family members gathered at the British Embassy in Washington, D.C., and consulate in New York, for a teleconference with MacAskill and his staff. But their pleas to keep Megrahi in Scottish custody evidently fell on “deaf ears,” he says.

Duggan is also dismayed that MacAskill has ducked the issue of releasing Megrahi’s medical records. Proponents for Megrahi’s release claim the former Libyan intelligence officer has prostate cancer and three months to live.

But MacAskill has only released a document with the redacted names of several oncologists attesting to Megrahi’s terminal condition while his actual medical records remain under seal. Expecting the public to accept that claim at face value is asking too much, Duggan says.

“I’ve been to Lockerbie and heard from people there, how the Christmas presents fell from the sky,” he says haltingly, his voice trailing off. “A few weeks ago we saw Bernie Madoff get sentenced to 150 years in prison. And that was only money. Where is the justice here?”

Douglas Rosenthal, Constantine Cannon

Douglas Rosenthal, a former Sonnenschein partner who helped negotiate the Lockerbie victims’ $2.7 billion settlement in a 2002 effort spearheaded by James Kreindler of New York’s Kreindler & Kreindler, isn’t surprised by Megrabi’s release.

“I’ve been dealing with the Libyans for some time and they’ll stick it to you afterward,” Rosenthal says.

The release was clearly orchestrated to further political discussions between the U.K. and Libya over oil, he says.

Since Congress passed the Libyan Claims Resolutions Act a year ago, all of the victims Rosenthal represented have been paid. He remains in constant contact with victims’ families to “get the truth out about Libya’s complicity” and is trying to help other private victims of terrorism.

Rosenthal is doing that work at a new firm, Constantine Cannon, after leaving Sonnenschein four years ago because of a much-publicized dispute over Lockerbie pay. A court later awarded Rosenthal a nominal amount on top of his fee in the case.

Christopher Curran, White & Case

After ditching Arman Dabiri — the Libyan government’s long-time outside U.S. counsel — for White & Case in spring of 2008, Libya finally started seeing positive results in its decades-long legal disputes with U.S. authorities.

Christopher Curran, head of the firm’s D.C.-based litigation practice, led a White & Case team that represented the Libyan government in 20 cases that represented all U.S. litigation against Libya.

With White & Case’s help, those cases were settled in last year’s bilateral agreement between the U.S. and Libya that granted the Libyan government immunity from future terror-related civil suits. Libya also paid $1.5 billion into a fund to settle claims by other alleged terror victims, enabling full diplomatic relations to resume between the two countries. (Legal Times named Curran one of its nine “Visionaries” for 2009 for his role brokering the agreement.)

White & Case, however, did not play any role in winning Megrahi’s release, says Curran, who declined to comment on the matter because the firm is not authorized to comment on behalf of the Libyan government.

Michael Bernstein, Covington & Burling

Michael Bernstein’s was just one of 270 lives that abruptly ended in the winter sky over Scotland. But his story is a particularly poignant one for lawyers.

After graduating from law school at the University of Chicago in 1979, Bernstein began his legal career in the litigation department of Covington & Burling. He stayed there until 1985 before leaving the firm for a higher calling, says his wife, Stephanie, a rabbi in Bethesda, Md.

Bernstein joined the Justice Department’s Office of Special Investigations to hunt former Nazi war criminals. It didn’t have the glamour of the silver screen, but as assistant deputy director of OSI, Bernstein was personally responsible for deporting seven of the 24 former Nazis deported during the OSI’s first 10 years of existence, according to his New York Times obituary.

“Mike was thoughtful, quiet, and committed,” says Covington litigation chair Gregg Levy, who lived in the same D.C. neighborhood as Bernstein. “He chose a path ensuring that that horrors of the Holocaust were not forgotten that speaks for itself.”

Bernstein died while returning from Vienna, where his obituary states he “persuaded the reluctant Austrians to take back some native sons they would rather forget, beginning with an Auschwitz SS guard, Josef Eckert.”

His wife says she was “sick to her stomach” when Megrahi was released and “incredulous” that her husband’s murderer might spend the rest of his life under house arrest in a villa overlooking the Mediterranean.

“What kind of world do we leave if we wash our hands of this?” she says. “What kind of people are we if we do this?”

Instead Stephanie Bernstein hopes that her husband’s dedication to the pursuit of justice remains his legacy, a legacy summarized by a note he hung on the door of his office: “The law sometimes sleeps, but it never dies.”

[ Legal Week ] Ashurst’s head of restructuring Nick Angel is set to leave the U.K. firm to join Milbank, Tweed, Hadley & McCloy.

Angel, who has been a partner with Ashurst since 1997, is expected to leave Ashurst this week, although it is unclear when he will formally join Milbank.

During his time with Ashurst, Angel has worked on a number of high-profile deals including 2008’s sale of Teeside Power to Suez and Gaz de France.

Milbank has a leading restructuring platform in the U.S. but has yet to make any inroads in London, with Angel marking the first restructuring partner for the office. He will take the total partner count in the office to 14.

Earlier this year Milbank recruited litigation partner Julian Stait from DLA Piper, with the hire marking the firm’s first lateral partner-level appointment in London since February 2007.

Dennis Dunne, head of Milbank’s financial restructuring group and a member of the firm’s executive committee, said: “In Nick we have found a true leader in the field of complex international restructurings. His joining complements the London team at a time when the firm is extremely active in this field. We feel uniquely positioned to offer a true global financial restructuring capability with enhanced depth and breadth across the office network.”

News of Angel’s departure comes after Ashurst brought in highly-rated restructuring partner Dan Hamilton from White & Case on Aug. 10. There are no immediate plans to appoint a new head of restructuring at Ashurst; however, Mark Vickers was recently appointed to the newly-created role of global managing partner of restructuring.

In a statement, Ashurst said: “We are grateful for the contribution that Nick has made over the years and we wish him well for the future.”

[ Legal Week ] Jones Day has made its second lateral hire in London this year with the recruitment of Mayer Brown competition and antitrust head Frances Murphy.

Murphy will join Jones Day on Sept. 1 as London head of antitrust. Her practice focuses on the pharma, biotech, telecom, retail and construction sectors.

The London antitrust practice at Jones Day has been without a head since the departure of Greg Olsen to Clifford Chance in 2007. Murphy will become the firm’s third London-based antitrust partner.

Jones Day’s London partner-in-charge Russell Carmedy said: “In Frances we have yet another excellent partner to advise on a broad range of antitrust issues in the U.K. and internationally.”

Frances added: “I am flattered to have been approached by Jones Day and to have been offered the opportunity the firm has given me. I very much look forward to working with the team to achieve what they have in mind.”

The last partner to join Jones Day was property litigator Richard Anyamene, who arrived from LG in March.

At Mayer Brown Murphy will be replaced as head of competition and antitrust in London by partner Gillian Sproul, who has been at the firm since 2005, representing clients in cartel and abuse of dominance cases.

Mayer Brown London senior partner Sean Connolly said: “Gillian has been a significant driving force behind the success of the competition and antitrust practice in London and we look forward to working with her to achieve the continued growth of the practice as part of the firm’s global ambitions.”

[ New York Law Journal ] Citing recently passed federal legislation to enhance the protection of child-trafficking victims, a New York state judge has concluded that a Guatemalan teen abandoned by his father on Long Island should remain in the United States.

In E.G. v. M.G., Family Court Judge Robin M. Kent of Nassau County observed that the Trafficking Victims and Protection and Reauthorization Act of 2008 permits a child to petition for special immigrant juvenile status even if there is a fit parent living abroad, so long as the minor has been abused, neglected or abandoned by one parent.

And, noting that E.G. was living in a stable home with “loving” and “supportive” foster parents, Judge Kent ruled that it would not be in E.G.’s “best interest” to return to his mother in Guatemala.

E.G. was born in Villa Nueva, Guatemala, where he was raised by his mother and siblings. He came to the United States “by ways unknown to the Court” when he was about 13. He reported that he had been beaten by his mother in Guatemala.

In the United States, E.G. initially lived with his aunt, uncle and father while attending Valley Stream North High School. Later, the boy and his father moved to a less-expensive apartment, at which point E.G. claims his father began spending all of his money on alcohol. Evicted from the residence, the pair moved to another home in Elmont, N.Y.

On Jan. 1, 2009, following an argument between E.G., then 15, and his father, the father packed all of his belongings and took off, leaving the boy alone without any food or income. Later that month, Judge Kent directed that E.G. be removed from the home. Numerous attempts to contact his father have been unsuccessful.

In May 2009, the attorney appointed to represent E.G., Bruce J. Cohen, asked the court to issue an order that E.G. qualified for special immigrant juvenile status, a prerequisite for applying for permanent residency.

Federal law, 8 U.S.C. §1101(a)(27)(j)(i), as amended by the 2008 act, permits a juvenile court judge to make special findings granting that status for an immigrant child residing in the United States who is in the custody of the state or someone appointed by the state or juvenile court.

The judge must determine that the child is under 21; unmarried; has been declared a dependent of the juvenile court; remains eligible for long-term foster care due to abuse, negligent or abandonment; continues to be dependent on the juvenile court; remains eligible for long-term foster care in that family reunification is not a viable option; and it “would not be in the minor’s best interest to be returned to the country of nationality.”

Judge Kent pointed out that under New York law, E.G.’s mother could not be deprived of her custodial rights simply because her son would have a better quality of life in the United States. But she said that was not a factor here because the mother “effectively abandoned her parental responsibilities.”

The boy’s mother submitted to the court a sworn affidavit expressing her wish that her son stay in the United States rather than return to Guatemala, where she said members of his former gang were looking for him and had threatened to kill his family if they did not find E.G.

When deciding whether a minor is eligible for protection under §1101(a)(27)(j), a Family Court need not determine whether a minor child “would be at risk of harm if returned to the country of origin,” but “needs only to find that return would not be in the child’s best interest,” Judge Kent observed.

According to E.G. and Cohen, E.G. is living in a “stable” home with “loving and supportive” foster parents, and attending school, which he could not do in Guatemala, she added. Judge Kent noted the teen “is free from the physical and verbal altercations” he had with his father and the “corporal punishment he attests to receiving at the hands of his mother.”

“It is the Court’s opinion that it would not be in E.G.’s best interest to return to his native country of Guatemala,” she concluded in granting Cohen’s motion and issuing an order of special findings with respect to E.G.’s special immigrant juvenile status.

Melissa DiTomasso handled the case for the Office of the Nassau County Attorney.

[ Daily Business Review ] If not for banker Bradley Birkenfeld, “a massive tax fraud scheme” by Switzerland’s UBS bank to hide the assets of wealthy Americans from U.S. tax collectors would never have been uncovered, prosecutors told a Fort Lauderdale, Fla., federal judge.

Birkenfeld’s attorney said his client is responsible for revamping international banking laws to make it easier to prosecute people who squirrel away money in foreign tax havens.

But it’s Birkenfeld who is going to prison.

Not the California real estate mogul who hid $200 million with Birkenfeld’s help. And not his boss, who remains a fugitive from U.S. justice in Switzerland.

U.S. District Court Judge William Zloch sentenced the former UBS banker Friday to three years and four months in prison for failing to disclose his UBS client list when he went to the Justice Department in June 2007 with details of widespread tax evasion coordinated by high-level UBS bankers. Prosecutors asked for a 2 1/2-year sentence, and the defense sought probation.

Birkenfeld wouldn’t have been prosecuted at all if he had just owned up to his own role in the scheme, prosecutors said.

Zloch also ordered Birkenfeld to pay a $30,000 fine and surrender to start his prison sentence Jan. 8. Zloch did not explain why his sentence was tougher than the government’s recommendation.

Birkenfeld provided details on how UBS bankers infiltrated the United States on behalf of Americans looking to hide assets. Switzerland’s largest bank used a vast array of foreign foundations, corporations and shell companies in the Caribbean, Latin America and elsewhere to hide the money.

“Without Mr. Birkenfield walking through the door of the U.S. Department of Justice in summer of 2007, I doubt this massive fraud scheme would have been discovered by the United States government,” Assistant U.S. Attorney Kevin M. Downing, a tax division prosecutor in Washington, told Zloch.

Downing said Birkenfeld’s assistance led to several breakthroughs including a deferred prosecution agreement with UBS that cost the bank a $780 million fine.

But Downing would not excuse Birkenfeld for not owning up to his role in helping UBS clients, particularly one of its largest tax cheats, real estate mogul Olen Olenicoff. Birkenfeld helped Olenicoff hide $200 million and avoid paying $7.2 million in taxes. His 2005 tax return listed a home in Lighthouse Point, Fla. He ended up on probation after paying $53 million to the government.

Downing said the United States can’t allow whistleblowers to “put one foot in the door” to protect their own interests. He noted Birkenfeld made it possible for Olenicoff to transfer hidden assets from UBS to a co-defendant, Liechtenstein banker Mario Staggl, who remains a fugitive.

Birkenfeld told Zloch he was willing to tell investigators about UBS’ illegal operations but couldn’t identify his clients.

“The problem was I was under Swiss law. If I divulged any names, I would go to jail in Switzerland,” he said in court.

David Meier, Birkenfeld’s Washington attorney, called the case “unusual and extraordinary.” He said his client provided the road map for the UBS investigation that is changing the world of international tax law.

“He had the courage to stand up,” Meier said.

The tall, balding banker told investigators that UBS took extraordinary measures to avoid a paper trial for its customers, setting up a network of shell companies in banking havens and, in Birkenfeld’s case, smuggling diamonds into the United States in a toothpaste tube.

Already an informant, he was arrested last year as he returned to the United States and pleaded guilty to tax conspiracy in June 2008.

Birkenfeld said he was plied with bonuses by UBS but was never told the consequences of his actions. He told Zloch he went to his superiors with concerns about the bank’s cross-border practices, but “I realized there was a cover-up by the corporation.”

Federal prosecutors have charged a handful of UBS account holders as well as a higher-ranking UBS banker, a former UBS banker and a Swiss attorney.

In a classic carrot-and-stick approach, the IRS is asking U.S. taxpayers with UBS accounts to report their holdings in exchange for limited amnesty while threatening to charge anyone it learns about.

Downing said he anticipates using Birkenfeld as a witness in upcoming UBS-related tax trials and could request a future sentence reduction based on his continued cooperation.