Oh, one more thing before I get to that. I had drinks with Osama bin Laden’s sister. Seriously, no lie. Now, it’s a fact that Mohammed bin Laden, Osama’s randy father and billionaire Saudi construction king, had twenty-two wives and fifty-four kids, many of whom lived all over the world. So it wasn’t as if Nadia had just come from cleaning her big brother’s AK-47. She was in her late twenties, with classic Arabian features, long dark hair, and was always dressed to the nines. We moved in the same circles, so when I ran into her at La Centra bar I couldn’t resist a chat. She had no aversion to alcohol and I don’t think she’d ever worn a hijab.
It got pretty heated. She was defensive, which was understandable given that having the name Bin Laden was, at that moment, akin to being Ms. Hitler.
“You Americans shouldn’t be so surprised at what’s happened,” she scoffed as she sipped her Courvoisier. “You are hated all over the world.”
“Really?” That steamed me up. “Put the shoe on the other foot, Nadia.” I was trying to be polite, but I’m sort of a chainsaw looking for trees and it’s hard to keep it in check sometimes. “It would be like an American flying a plane into Mecca and killing three thousand innocent Muslims. That’s what we’re talking about here. Understand?”
Needless to say, we did not go dancing.
On October 2, I walked into 16 Rue de la Corraterie for my first day with UBS Private Wealth Management. It was a fine-looking four-hundred-year-old brownstone, five stories high, without a single plaque or anything else marking it as a bank. UBS headquarters, a much larger modern edifice, was a couple of blocks away and adorned with the blood-red UBS logo of three enormous skeleton keys. Our much smaller building said: “We’re anonymous here, and you will be too.”
Right away I understood this was going to be different from Credit Suisse or Barclays, where dealing with offshore clients had been done with aplomb and no overt indication that anything we did might be frowned upon elsewhere. These folks at UBS knew their profits were hauled in from the muddy waters between tax regulations and they weren’t pretending otherwise. You needed multiple clearances to get past the front desk and up to the second floor, where thirty private bankers and their assistants worked at the “North American Desk,” an open area much like the trading floor at State Street. Except this was no Boston frat-boy club; the bankers were dressed like GQ models, the desks were heavy and neat, chairs and couches plush, and stock market figures trickled down flat screens like something out of The Matrix. Rolling bars were stocked with liquor to keep the folks happy as they burned up the phone lines, and since the Swiss couldn’t abide “no smoking” paranoids, cigar smoke curled through multilingual conversations about VIP clients, gourmet lunches, and Net New Money. You weren’t getting anywhere near a computer without multitiered passwords. The place reminded me of a Cold War CIA spy cell. I liked it.
On my first day at work, I was given a list of names of secret account holders I’d been assigned to service. Some of them, corporate bigwigs, made me smile with pleasure. One of them made me blink; Abdullah bin Laden, half-brother of the now infamous Osama. Abdullah had $14 million in a secret account, but tracking him down to discuss his investments wouldn’t be easy. He’d been residing in the Boston area along with other members of the OBL clan. Right after 9/11, while all commercial flights were grounded in the States, the Bush administration had whisked them all away on a private jet. My new clients were going to be very interesting.
For the first month, Valerie and I did the “Nice to meet you” and “So glad we’ll be working together” routine. Naturally everyone loved her. She spoke perfect English, French, and Italian, smoked at her desk, and could practically get a client to unzip his pants by phone. Me, they weren’t so sure about. I was the new Head of Business Development, a big American dude brought in from the outside. Thankfully, none of them knew about my performance-based bonus deal or it would have raised a major ruckus. But I just took my time charming them all, and after a few parties at my place and a few cheese fondue dinners, they warmed up.
Early in November I drove up to Ermatingen for a private banking “off-site.” For those of you who aren’t corporate types, an off-site is a meeting, usually held in some exclusive resort, where the company wines and dines its big earners, tells you how fabulous you are, and shows you how nice they can be if you do a lot more. But this place was over the top, the Wolfsberg Castle, a four-hundred-year-old sprawling fortress where Alexandre Dumas and Franz Liszt had once bedded down. I mean, the place looked like the Magic Kingdom and was valued at hundreds of millions, and since UBS was swimming in cash, they’d bought it. As I parked the Ferrari and looked up at its towers and parapets, I thought about our house in Hingham and laughed. “Now that’s a fucking castle!”
About a hundred private bankers from all the branches in Zurich, Geneva, and Lugano were there; no assistants. The senior bosses held sway over the meetings and five-course dinners: Christian Bovay, his counterpart in Zurich, Hansruedi Schumacher, and their superior, Martin Liechti, who knew of me because he’d had to sign off on my unprecedented bonus deal. But I didn’t draw any special attention because I think none of them really believed I’d pull in some whale of a client. They all thought I’d been bluffing.
Surprise! In the middle of dinner in the castle’s great hall, with waistcoated waiters bustling, champagne glasses clinking, and the stone fireplace roaring, a messenger whispered in Bovay’s ear. He got up from his table and came over to mine, and I was just hoping his dandruff wouldn’t salt up my chicken française.
“Bradley, we’ve just gotten word that this client of yours, Mr. Olenicoff, has wire-transferred his first tranche from the Bahamas into our accounts.”
“Oh, really, Mr. Bovay? That’s good news. How much was it?”
“Eighty-nine million dollars.” He blinked a few times.
I grinned and tried not to fist-bump the air. “Well, don’t worry. I’m sure the rest of the two-hundred mil will come along shortly.”
Bovay staggered away and quickly came back with his boss, Martin Liechti, a slick-looking slim dude with oiled black hair and manicured fingers. I stood up as Liechti pumped my hand and congratulated me, and then word swept through the dinner like a brushfire.
“How much did he just bring in?”
“Ninety million!”
“From a single client??”
People were coming over to my table and slapping me on the back. From that point on at UBS, I was a rock star.
I started traveling on marketing trips for UBS almost right away, and eventually settled into a schedule of five or six a year to the States. But before setting the first one up, I went through the standard in-house training and familiarization that all new employees have to endure. With two years at Credit Suisse under my belt and another four years at Barclays, I figured there wasn’t much they could teach me about private banking products. I was right about the products, such as the standard numbered accounts, stocks and bond offerings, hedge funds, currency transactions, gold and silver bullion, fine gems, and energy futures. However, it turned out that UBS also had a uniquely wicked and creative way in which to make money off clients. These guys were as slick as eels in an oil bath, something I discovered the first time Christian Bovay pulled five of us “newbies” into his boardroom for a lecture.
“Gentleman, it is natural that your first objective should be to acquire a client’s money and secure it in one of our numbered accounts.”
Bovay was a fidgety dude, pacing back and forth at the end of the table while the rest of us rocked back in plush leather chairs. I was already inwardly rolling my eyes, thinking they should rename this place the “bored room.” Then he smiled through his burglar-tool teeth, a sort of creepy grimace that’d make a schoolgirl shiver.
“However, your second and most important objective is to make that money unavailable to the client, unless UBS benefits in multiple ways.”
That made us all sit up and take notice. Bovay came up with
a black marker and wrote “10 million” on a large white poster board propped on an easel.
“Let us say, for example, that your client is a cattle rancher from Texas and wishes to secure $10 million in a numbered account. We oblige him, of course.” Another evil-looking smile. “He understands, from reading and signing our contract, that his $10 million will make no interest unless he instructs us to place the funds, and that we will be charging him a fee of three percent per annum, simply for managing his money, along with custody and transaction charges. However, our happy cowboy is pleased that he is paying no taxes on his nest egg, so such a minimal fee is attractive.”
Well, no surprise there. That’s how all the Swiss banks handled secret accounts. You paid them a fee for keeping your secrets safe and the tax authorities off your ass, but you didn’t make a dime of interest unless you instructed the bank to invest it.
“But now, we get a bit creative,” said Bovay. “You tell your client that it’s a shame for his money to be sitting here in Geneva doing nothing, and you offer him a time deposit with a five percent return. ‘Wonderful!’ he says, and we lock his money away for a year, at the end of which it will accrue to $10,500,000.” He jotted that new figure below the first one. “Doesn’t that look attractive?”
It certainly did. The guy’s making half-a-mil on tax-free cash for doing nothing.
“And now,” Bovay said with a big flourish. “You simply wait until your cowboy suddenly needs to use that money, which most of our clients do at some point, and you lend it back to him, at a very reasonable interest rate.”
Excuse me? By the end of that first training session my head was swimming. It was a helluva scam. You get your client to lock up his ten mil for a year or more, but suddenly he needs it to buy a real estate property somewhere, so you hit him with this.
“Mr. Earp, I’m afraid your $10 million can’t be released until the time deposit matures. However, UBS can grant you a loan of ninety percent of your capital, $9 million. You understand that we must keep $1 million in the account as collateral, so very sorry. And of course a bank loan comes with payments and interest. But, it’s an attractive rate and you’ll have all the liquidity you need.”
Are you getting this? UBS was making a fee for holding the guy’s cash in the first place, then making another fee for loaning him his own damn money! And guess what? The guy’s happy! He’s getting his deal done, and he’s still doing it with tax-free cash! I couldn’t believe it, and you know what? It worked, over and over again.
My next set of training sessions shattered any notions I might have had that UBS wasn’t up to speed on American tax regulations, or that they didn’t exactly know what Americans could or could not do with their money overseas. In fact, UBS had hundreds of domestic branches all over the States, replete with lawyers and CPAs, so they knew the US banking laws and tax codes upside down and backwards. Only about thirty of us on the Americas Desk would actually be traveling over there to hunt for money, so they pulled us into the boardroom again.
This time the instructor wasn’t Bovay, but a little bald dude from “Security and Compliance.” After his lecture, I thought they should change his department’s title to “Noncompliance and Ass-covering.” His name was Hans; he had a thick Swiss-German accent and was dressed like a typical Swiss, wearing a trim black suit and white socks. I kept waiting for him to come up with a riding crop and slap it on his palm.
“Gentlemen! You vill lissen very carefully, please. At some juncture in your travels, zeh American customs agents vill no doubt stop you and ask you difficult questions. You must be prepared!”
I’m sitting there thinking, This is too fucking weird. It’s like some World War II movie with Otto Preminger, and we’re the Nazi agents being sent to New York.
“Und so,” Hans went on, “you vill never keep zeh names or telephone numbers of your clients in your mobile devices.” He tapped his bald skull. “You vill keep zem here, in your head. Und, if you absolutely must bring financial data sheets with you, you vill keep zem only on encrypted laptops which we vill supply. Undershtood?”
I was so tempted to snap my arm up and yell, “Heil, UBS!” I didn’t, but I did decide right then and there that I’d never carry an encrypted laptop anywhere near the US, nor was I going to memorize a hundred client names and phone numbers. Maybe I wouldn’t be handing out numbered account brochures, but I wasn’t about to start sneaking around like some nuclear spy. If anything would raise a red flag, that would.
“So, gentlemen. Vat do you do if you are stopped by customs agents and qvestioned? Vell, zer are three scenarios. First, an agent vill ask you if you are here in zeh States for business or pleasure. Vat do you say?”
One of my mates raised his hand. “Business. You should never lie.”
“Incorrect!” Hans slapped the table. “You are always traveling for pleasure!”
This went on for an hour, and I had to admit that some of Hans’s points were well made. But all in all the guy gave me the creeps and I decided to come up with my own “security and compliance” plans, if for no other reason than they’d be different from everyone else’s, lessening my chances of getting nailed. I was lucky because I was the only banker carrying a US passport. At the end of the session he announced that his next class would be “verry interesstink,” and all about surveillance and shaking a tail. My conclusions? These UBS guys weren’t fucking kidding.
As I immersed myself in the UBS culture, I discovered that the bank had a well-established program for hobnobbing with wealthy folks the world over, and it had been going on long before I came aboard. The firm seemed to be a great benefactor of worthwhile causes, a charitable supporter of artistic endeavors, and a sponsor of popular sports stars. But at every art exhibit, tennis match, charity event, yacht regatta, or Formula One race, UBS bankers were there to rub elbows with rich folk, so it was all about Net New Money and return on assets. One of the bank’s big projects was the Verbier Music Festival, held at the Verbier ski resort in Switzerland. UBS footed the bill to stand an orchestra comprising young talent, then booked their appearances in New York, Washington, Chicago, Miami, and Los Angeles, wrapping it up in Sydney and Munich. The first gig was starting at Carnegie Hall.
“Would you care to go, Brad?” Bovay asked me one morning as he brandished a fistful of tickets.
“You bet your Swiss watch!” I said, which was sort of funny because the guy wore a cheap Hamilton, but I whipped out my Rolodex and packed my bags.
In New York I checked into my room at the Plaza, rented a tux, and showed up at Carnegie Hall for the gala, where I linked up with three guys I’d invited: an Upper East Side plastic surgeon, a cap-and-crown dentist from Queens, and a real estate dude from Jersey who looked like Tony Soprano. The orchestra played Strauss, I played it cool, and then I invited them all to a late dinner at the Russian Tea Room next door. At the time that place was like Lenin’s wet dream, with red leather banquettes, paintings of charging Cossacks, and the best beluga caviar, vodka, and borscht. Per my usual style, I talked about everything but money, until they couldn’t stand it anymore.
“So, Bradley,” the Botox bandit finally asked me as he gobbled up his Ptichye Moloko. “What exactly can you do for us?”
I sipped my Anri XO brandy and smiled at him. “What I can do for you, Dr. Gold, is zero.”
“Pardon me?” He looked a little stunned, and so did the mob-clone and the dentist.
“Actually,” I said. “It’s three zeros. Zero income tax, zero capital gains tax, and zero inheritance tax.”
Well, that broke the ice, and once they stopped laughing I casually wandered into all the lush green fields of slushy money they could enjoy in my Swiss pastures.
“Gentlemen, let’s just imagine a scenario,” I proposed. “You’re a professional who’s worked very hard, and you’ve saved up $6 million. You’re also a smart, cautious guy, so that money’s not in the market, which is good ’cause Wall Street’s currently in the shitter thanks to Mohamed
Atta. With me so far?”
The three of them nodded, and I could tell from the gleam in the Soprano dude’s eye that he had that much money. Maybe the doctors had a couple mil apiece.
“So,” I went on, “that $6 million’s sitting in Chase, making a lousy 1.3 percent, because interest rates currently suck. But then you decide to visit me in Geneva, and I take $5 million of your money and put it into a declared account.”
“A declared account?” the dentist scoffed. “What good is that? I’ll get killed on taxes.”
“Patience, my good man.” I raised a finger and gave him my “shut the fuck up and listen” smile. “We take the other $1 million and put it into an undeclared numbered account, which nobody knows about. You go home, and a month later, you take a loan of $4 million from your declared account and I add it to your numbered account, making that balance $5 million. Still with me?”
They nodded like the Three Stooges, but these guys were no dummies. I could almost hear the calculators clicking in their brains.
“So, now I look around for a very good investment. Ah, I’ve got it! Rheinmetall AG in Dusseldorf, which happens to make weapons systems and tons of ammunition. And since the Germans are already over in Kabul kicking Taliban ass, that stock’s going to soar. Now, can you buy that stock with American dollars? No, you can’t, so I take your five mil and buy euros, which sell dirt cheap, and then I buy your Rheinmetall stock. Six months later, I sell out for a twenty percent return, and now you’ve got $6 million in your numbered account.”
“That’s impressive, Brad,” said the Botox bandit. “But it’s undeclared money. I can’t use it.”
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