Lucifer's Banker

by Bradley C. Birkenfeld

  By the early twenty-first century, there were more than 130 private banks in Geneva alone, a ratio of one bank for each city block. Private banking accounted for one-sixth of Switzerland’s economy, and Swiss politicians regularly migrated from public service to the chairmanships of banks, trust companies, and law firms, guaranteeing the status quo. Rogues the world over benefited from Switzerland’s corrupt banking practices. There were billions, no, trillions in hidden and pilfered assets.

  The rich and famous, the bad and ugly, intelligence agents and Mafiosi used their numbered accounts to hide money from wives, husbands, and business partners; to embezzle company profits; to fund small wars and finance drug cartels. Movie stars loved the intrigue of it all, and mistresses clutched Swiss Black American Express cards in their Louis Vuitton purses. Never mind that if you held a numbered account, you actually paid the Swiss a flat fee for the privilege and never received a penny of interest. The balance was yours to dream about, tucked safely away under your steel Swiss mattress.

  Best of all, money that no one knew about was untaxable money. For wealthy Americans who were less than forthright, it was a godsend. The American market was target-rich, and Swiss banks began assembling teams of private wealth managers who would travel to the United States, attending luxurious venues and soirées where potential clients were swimming in cash, and bring home the bacon.

  So that’s my brief lesson on the history of secret Swiss banking, and that’s where I came in. I learned the whole story from inception to present practices and realized that the Swiss operated with a wink, a nod, and a big grin. Did I care that much if the money I’d be handling was from ill-gotten gains, or hidden away to deprive some government of its lust for taxes? Nope. Somebody much higher up the food chain had decided it was all perfectly legal. I wasn’t about to start wearing a halo and going to confession.

  Speaking of confession, Credit Suisse was also my first foray into the deeper intrigues of numbered accounts. One day I was covering for a colleague on vacation, Carol Hambleton-Moser, when two of her clients called up. They were coming in together and wanted to withdraw $100,000 each, from separate accounts. No problem. The building concierge sent them up the elevator to a second concierge, who escorted them to a private salon. I showed up, introduced myself, and explained that I was covering for Carol. They were Italians, clean-cut, wearing blazers and slacks and carrying briefcases. I asked for their passports and code names, and tapped the computer.

  The system had multilevels of security to ensure that no impostor could just show up and withdraw someone else’s money. Everything checked out: passport numbers, code names, matching photographs, ages, and physical descriptions. I called my assistant and she arrived with a cash box and a money-counting machine. Before long the two Italians each had $100K locked in their briefcases. They signed the withdrawal forms, knowing they’d be charged a fee for withdrawing their own cash, but they didn’t seem to mind. We smiled and parted ways.

  After they left, I scrolled farther down in their computer records. They were both Vatican priests! Why were they keeping their money in secret Swiss accounts? I never asked a soul. Not my circus, not my monkeys.

  Anyway, about halfway through my overpaid education at Credit Suisse, Dr. Callegari suddenly announced that he was being transferred to Asia. The doc liked me and wanted to take me along with him, but I was having a helluva good time in Geneva and couldn’t envision the same thing in Singapore, where if you spat a wad of gum on the sidewalk the cops gave you fifty lashes in the city square. So, for a while I was “homeless” at the firm, wandering around and looking for a new foster father. I found him in Olivier Chedel.

  Olivier was a player, the guy in charge of all private banking for North America, the UK, Israel, and all of English-speaking Africa. He was a classy-looking Swiss-German guy in his late forties, with swept-back dark hair, cool blue eyes, a strong jaw, and a cleft chin, and he spoke flawless English, German, French, and Spanish. He’d show up on a Monday all sunburned from skiing in the Alps, on Wednesday don a tuxedo on his way to the opera, and by Friday he’d hop in his BMW Z3 and take off for Saint-Tropez. I liked him right off the bat, and with our first handshake I knew we were kindred souls.

  I spent my first days on the “Anglo” desk looking through all the account records, and noticed something strange. We had hundreds of millions of “English-speaking” money sitting in Credit Suisse vaults, but unless these rich dudes walked into the bank, nobody was seeing them face-to-face. Not one banker was out there visiting them. Really? To me, that was like owning an ice cream truck in summertime and never leaving the driveway.

  “So, Mr. Chedel,” I asked him one day over coffee (not Starbucks; the real Swiss stuff). “Who from our division services these clients?”

  “Well, my boy.” He gave it a dramatic pause and smirked under his Ray-Bans. “No one.”

  “No one goes out to visit them? Nobody schmoozes them or uses them to network and get more clients?”

  “Schmoozes,” he said. “An interesting colloquialism, but no. In case you haven’t noticed, Bradley, Credit Suisse is a very conservative firm.”

  “But what about marketing trips? Someone should be out there pitching our products and services. It’s a small investment for a potentially huge return.”

  “Well then, prove your point, Bradley.” He smiled and clicked his cup to mine. “Show me what you can do. Set one up.”

  And so I did. I picked out three cities—Toronto, Boston, and Hamilton, Bermuda—and I got on the horn and called every contact I knew from my State Street days and told them my new boss at Credit Suisse wanted to wine and dine their favorite clients. I booked all the flights, five-star hotels, and then Olivier and I took off for two weeks of Chateaubriands, primo boxes at hockey games, operas, jazz clubs, and chats about secret accounts amid swirling cigar smoke and Courvoisier. By the time it was over, six mega-money North Americans were frothing at the mouth to come to Geneva and hand over their fortunes to Olivier Chedel.

  “Well, Bradley, that was quite a performance,” he said to me as we sipped victory martinis on our hotel veranda in Bermuda. “You certainly delivered the goods. It’s a shame I won’t be able to use them.”

  “What do you mean, Olivier?” By this time we were on a first-name basis.

  “I neglected to mention that I’ve just resigned from Credit Suisse.”

  “You … what?” I sat up in my lounge chair and spilled half my drink.

  “Yes. I am going over to Barclays Bank in Geneva.” He enjoyed my stupefied gape for a moment and grinned that impish grin at me. “But don’t fret, my boy. You’ll be going with me.”

  Good-bye Credit Suisse, hello Barclays, the powerhouse of British banking. My salary went up to $200,000, I stayed in my luxurious flat, and all I had to do was pick up my briefcase and swing over to Barclays headquarters a few blocks away. Having tested my talents, Olivier knew he had the perfect point man whom he could trust. He gave me an office and a beautiful young Swiss assistant, Valerie Dubuis, and he sat on his leather throne behind a mahogany door and called me in for assignments. It was like he was “M,” Valerie was Ms. Moneypenny, and I was You-Know-Who.

  “Bradley, have a seat. I believe you’ll be stunned.”

  “What’s on the menu, Boss?”

  “Well, Barclays Zurich is closing operations and consolidating all of their accounts over here to Geneva, and that means all of their American and Canadian accounts.”

  “Why the hell are they doing that?”

  “Because they are oh-so-English, my boy. No imagination. The Zurich branch is washing their hands of billions for the sake of clerical simplicity.”

  “Let me guess,” I said. “No one services these North Americans.”

  “In your amusing parlance, ‘Bingo.’ You know what to do. Get on with it.”

  It was a license to make a killing. “Pleasure to meet you. I’m Birkenfeld … Bradley Birkenfeld, Agent 00$.” I compiled a dossier of all our North
American secret account holders, reached out to them (discreetly, of course), and filled up my planner with dinner engagements. Then I took off for Canada and the States and had a grand old time, staying in five-star hotels, riding around in limousines, and devouring fat steaks at Peter Luger’s in Manhattan as I feted existing clients, proposed more investments, and charmed them into turning over the names of their mega-rich friends. Now, these folks weren’t dummies. For the most part they were powerful, wealthy, successful men in their middle years, and we all understood they couldn’t just hand me a briefcase stuffed with cash and have me smuggle it back to Europe. So, these dinners usually concluded with cigars, cognac, the flick of my business card, and a subtle suggestion.

  “You know, Mr. X, Geneva is lovely at any time of the year. Maybe a man of your stature, with so many responsibilities and business pressures, should take a short break and enjoy its wonders. The magnificent mountains, gourmet restaurants, luxury shopping; it’s almost too much at times. And the women … Good God! You know, I was actually stunned to discover that all that Swiss stiffness is merely a cover, sort of like the Japanese. The sex trade’s booming and it’s all perfectly legal. Not that you’d partake, of course, but it’s an interesting cultural anomaly.” (wink)

  Naturally they showed up. I’d fly back to Geneva, exhausted, my jaw aching from smiles and sales pitches, and before I’d even unpacked, Valerie was pushing me out the door to welcome the folks I’d just met. Here we go again: fine dining, champagne, Swiss chocolates, and gorgeous Russian girls “charming” the pants off my clients at very reasonable rates. And then the handover: cash, jewelry, artwork. “A pleasure doing business with you, Mr. X.” And I was off to do it all again, making CHF 200K, living the high life, all expenses paid, just putting on a suit and making sure people were very happy. I was the only Swiss private banker at Barclays running this game—a total monopoly. I’d plop down in my first-class airline seat, humming my own version of “Ticket to Ride.” “I think I’m gonna be glad, I think it’s todaaay, yeah!”

  It was crazy. Even my vacations were rarely just that. Business fell in my lap. Taking a short leave in St. Barts, I met a comely blonde woman who turned out to be an adult-film actress. She spent two days at my digs, which wasn’t very restful, but she was fascinated with the prospects of a secret Swiss account, since she made most of her money in cash. A few weeks later she showed up at my flat in Geneva, carrying a pink suitcase and a giant teddy bear. She asked me for a serrated knife, decapitated the bear, and out poured $300,000 in cash. Barclays welcomed her money. Sometime later, US authorities welcomed her to a federal prison. She’d been convicted of insider trading, but I had nothing to do with that.

  “Well, a bit of bad news, Bradley.”

  I was sitting in Olivier’s office. He looked glum. “Is my phone bill too high?”

  “No, it was only a thousand dollars last month. Quite reasonable. However, Barclays, in its infinite wisdom, has decided no more solicitations of North Americans. They’re getting a bit nervous.”

  I knew what he meant. I was an avid reader of the Financial Times and closely tracked the regulatory agencies in the States, such as the Treasury Department and the IRS. We were heading toward the year 2000, the American economy was in flux, and whenever that happened there were big eyeballs on the rich folk—and tax-evaders in particular. I thought maybe my good days were done.

  “Well,” I sighed. “It was fun while it lasted.”

  “Don’t be so hasty, my boy. I’m sending you over to London. Not permanently, just a couple of weeks here and there. We’re giving you the three premier offices in the London branch network—Knightsbridge, Sloane Square, and Pall Mall. They’ve got bundles of money coming in from all sorts of wealthy customers and need an offshore home to house it.”

  My smile came back like a flashbulb. With the Brits, tax regulations were lax, to say the least. They didn’t regard an English gentleman’s overseas profits as depriving Whitehall of revenue. A British citizen could take his fortune, bring it over to Switzerland, and invest it in anything he wanted. Any profits he enjoyed, as long as he spent them outside the UK, were untaxable income. In fact, most civilized countries had similar regulations; don’t ask, don’t tell. Only the Americans and the Japanese were so tight-assed about taxes. But the Brits? “A gentleman never discusses his ailments or finances.”

  “So, Olivier,” I said. “Another charm tour?”

  “Just go make yourself comfortable on their couches, intercept a few million pounds, and bring it back here. There’s a good fellow. Off with you.”

  On the way back to my office, Valerie was sitting at her desk, chin in hand, beaming at me with those beautiful brown eyes. She already knew all about my assignment.

  “I like Rothmans,” she said. She was a smoker with a taste for fine cuts. “And Hermès scarves, and sexy British rock-and-roll bad boys.”

  “I’ll bring you the smokes and the silks,” I said. “But I never smuggle musicians. And besides, you don’t need me to match-make.”

  By the way, I never touched her. She was much too fine an assistant. We partied together on occasion, even skied a few times and teased here and there, but it was always hands-off.

  The London gambit was ridiculously easy, and just as Olivier described it. I’d show up, check into the Royal Automobile Club, the English gentleman’s club of preference in which I was a member, in Pall Mall near Piccadilly (it’s an absurdly luxurious five-star hotel, with its own fine restaurant, breakfast cafe, ballroom, library, two bars, and a health spa; but hell, I couldn’t look cheap), and then I’d make my rounds of the branches. The private banking managers at Knightsbridge, Sloane Square, and Pall Mall were relieved to see me, because they had all these mega-wealthy European tycoons selling off blocks of flats, container ships, and start-ups, and waltzing in with stacks of cash and expecting someone at Barclays to magically make it grow. And there I was, the Swiss concierge.

  “Birkenfeld, old boy, so glad you’re here. We’ve got this Romanian fellow, big real estate chap, with an extra million pounds sterling sitting here doing bollocks. We’ve suggested you’d be pleased to move it over to Geneva and have a go, and he’s all aboard. Likes tennis, by the way. Here’s his card.”

  So off I’d go to meet this Romanian dude and take him to dinner at Quaglino’s, where I’d chat about everything but money: girls, racehorses, the Cannes Film Festival. Then I’d suddenly produce a pair of tickets from my suit pocket.

  “Khosro, I heard somewhere that you’re a tennis fan. I happen to have two very good seats for Wimbledon next week. Why don’t we discuss elevating your fortune over a little excitement and sun?”

  “Wonderful, Bradley!”

  And it wasn’t just one client. They never handed me less than three files at a time. I had several memberships at the best British gentlemen’s clubs—East India, Royal Automobile—where I’d entertain them; stuff them with great food, scotch, and cigars; then whisk them off to their favorite passions: fashion shows, rugby scrums, cricket matches, football finals, horse races at Ascot. When a guy’s favorite horse is two lengths ahead on the back stretch and he’s on his feet screaming, that’s the perfect time to pitch him hedge funds because he’ll agree to just about anything.

  At the end of every two-week stint, I’d head back to Geneva carrying three to six dossiers with transfer instructions for millions of pounds. London was just handing me money, like a courier service! It was so easy an orangutan could’ve done it, and I milked that Swiss cow like nobody’s business.

  I know what you’re thinking. “This was his job?” Well, trust me, after a while it became exhausting. I mean, how many steaks au poivre and crèmes brûlée can you eat while stuffed in a suit before you’re dying for a hot dog and a beer at Fenway Park? I was rocketing back and forth, bringing in millions hand over fist, busting my ass for the firm, and building an impressive Rolodex of VIP-connected clients. But when bonus time came, it was never performance-based. I mean $20,
000 is nice at Christmas, but it didn’t reflect my victories.

  “I’m terribly sorry, Bradley,” Olivier would say, and he meant it. “I’m afraid it’s simply the British old-boy-network thing.” Then he’d thrust a finger at the ceiling. “They’re reaping your rewards upstairs.” Olivier was Swiss-German. The old boys liked him, but probably called him Hermann Goering behind his back.

  Meanwhile, the heat was being turned up by the American tax authorities, all over the world. Barclays was starting to divest itself of more and more North American offshore clients, which meant my clientele list in essence was frozen. One day I was sitting at my desk when Valerie popped her head in.

  “It’s Paul Major on the line, the relationship manager from Barclays Bank Bahamas.” I took the call.

  “Bradley Birkenfeld. How can I help you?”

  “Afternoon, Bradley. Paul Major here, Bahamas branch. Tell me, who’s the head of the US desk up there?”

  “Well, technically I’m the head, but we don’t travel there anymore. Why?”