Lucifer's Banker

by Bradley C. Birkenfeld

  Paranoia, on the other hand, was starting to creep into my bosses’ heads at UBS. I’d already seen it when I was privy to a panicky conversation between Hansruedi Schumacher and Martin Liechti, “senior capos” for our business in Zurich. Schumacher realized that because UBS had hundreds of branches in the United States (resulting from the 1999 UBS acquisition of Paine Webber), the bank was very vulnerable to American regulators; if things blew up, we could lose our license to operate there.

  “Look, Martin,” Schumacher said to Liechti, “we’re getting into this regulatory environment, which is very dangerous. What we should do is close down the Americas Desk and move it outside the bank to a small Swiss entity that then books the business with UBS.”

  “Close it down, Hans?” Liechti was aghast. “Are you insane?”

  “Just listen, Martin! Your people essentially resign from the bank and become independent asset managers for this private entity. Then they can take their existing business, plus refer any new business back to UBS, and book it with us. But now UBS will have plausible deniability. If the Americans come calling, we can say, ‘It wasn’t us! It was those people over there!’”

  But Liechti was having none of it. He didn’t want to lose his power base.

  “Hans, you’re fucking everything up I built over the last decade. Fuck you!”

  Schumacher just sighed and said, “Well, we’re going to get screwed one day and this is not good.” Soon after the exchange Schumacher resigned from UBS and joined NZB, a boutique Swiss private bank. My Geneva colleague Hanno Huber and four senior Zurich private bankers followed their former boss’s lead and also joined NZB, taking with them 1.5 billion Swiss francs in assets, including Ty Warner’s, of Beanie Babies fame. That’s when I started thinking: This thing can’t last forever. Huber’s been in this business his whole life, and if he’s thinking that way, we’re heading for the falls. And I mean like Niagara Falls …

  Among my hunter-gatherer colleagues, the rumor mill was starting to grind, with folks whispering dark jokes about doom and gloom. My Swiss buddy Jacques Leuba cruised by my desk one day and dropped a comment with a wry smirk.

  “Work harder, Bradley, faster. Bring in that cash, mon ami! Humpty Dumpty’s about to fall!”

  “Maybe we should shit-can all this traveling crap and just print money,” I answered. “I’ll bet somebody on the Russian desk knows an excellent counterfeiter.”

  Jacques laughed, but he was cynically responding to pressure from above, particularly from Martin Liechti. Our überboss was cranking out memos like the following to all of us private bankers:

  Dear Colleagues,

  The first five months of this year have been very challenging for our industry. The decline in investor confidence, the military conflict in the Middle East, and the ever-increasing regulatory scrutiny that has descended upon our business continue to present difficult challenges. We are, however, convinced that even in this difficult environment, we are well positioned to provide our clients with the best solutions for their financial needs.

  Net New Money is, as you know, a key element for our success. This means that we all have to work hard to achieve our NNM goals for this year and the years to come …

  I am already looking forward to awarding those of you who will achieve this goal!

  Liechti didn’t end his memo with love and kisses, but instead with a picture of a Breitling watch, which basically meant “Work your asses off for me and I’ll throw you a bone.” It was typical corporate pep-talk bullshit, and most of us scoffed and just carried on, because we were already working as hard as we could to meet Liechti’s unrealistic Net New Money goals. And naturally every time we hit our annual expectations, let’s say CHF 40 million per private banker, he’d raise the bar. “That’s nice, but it’s not enough! I want to see 60 million Swiss francs!” Besides enduring all this football coach crap, Security and Compliance and that Gestapo wannabe were constantly sending us watch-your-ass memos about properly encrypting the files on our laptops and making sure we knew how to lose a tail. It was pure Sicilian Mafia modus operandi, stuffed in a cheap corporate suit.

  With all the pressure from above, risks bubbling up from below, and our sophisticated clients getting nervous with the stiffening regulations, it was starting to not be so much fun anymore. I took it in stride, because I knew no toga party lasts forever. The band gets tired, the food and drinks run out, the girls’ makeup starts to run. The band played on, but the show was getting old.

  Moreover, it was starting to get ugly, too. I hadn’t much taken to Christian Bovay from the first day I met him, but serving under him for years had revealed all the sliminess of his character. Bovay was a typical Swiss bureaucrat, petty and spiteful. He didn’t like going out in the field and risking his ass, but he resented the fact that his troops were out there living high on the hog. Often he’d try to take credit for someone else’s Net New Money coup, which was absurd because all he’d done was rubber-stamp the paperwork. He benefited plenty from our hard work and successes, yet he was always sowing disharmony, whispering in people’s ears about how one banker was better than the other or who was working less but getting bigger rewards. Almost from the moment I brought in Olenicoff’s $200 million, Bovay regarded me as a wise guy who’d pulled a fast one and was getting an unfair cut of the nut. Most of the time I brushed him off.

  And then he stole Valerie away from me.

  He knew how much I liked her, and she liked me, so he targeted our bond because he couldn’t touch my wallet. He had her transferred over to be his personal assistant, which was within his power as my boss. He knew there was nothing I could do about it except quit the bank. Valerie was pissed as hell.

  “It’ll be all right,” I told her. “We’ll still be on the Desk together and we’ll still party and have fun.”

  “But Bradley, I can’t stand him!” she whispered from her new desk just outside Bovay’s office. “He drinks black coffee all the time and never chews gum! And those teeth!”

  I laughed and squeezed her hand. “Put a bowl of mints on his desk. Maybe he’ll take the hint.”

  But nothing cheered her up and she started talking about leaving. And Bovay, who could see how obviously upset she was about the change, instead of trying to win her over, screwed her on her annual bonus! When I brought her over from Barclays I’d promised her a big raise—20,000 Swiss francs. That was my deal with UBS and she’d gotten it. But bonuses were up to the boss’s discretion, and Bovay was just being a spiteful prick. I found her one morning outside the bank, smoking a cigarette and crying. When she told me what was up, I nearly blew a gasket. I went upstairs and shouldered my way into Bovay’s office. He was on the phone.

  “What’s with Valerie’s bonus?” I was trying to keep from knocking him out.

  “Not in the budget, Bradley.” He tried not to grin through those tank-trap teeth.

  “Not in the budget? Whose fucking budget?!”

  “She’s only been with me for three months. I haven’t had time to evaluate her performance. Maybe next year. And I’m on the telephone. See?”

  I stormed out and thought about it for a minute. I could fume and argue and fight it, but the holidays were only days away. So I took out my ATM card, went over to the main building and the machine in the lobby, withdrew ten 1,000 Swiss franc notes, and put them in an envelope. You can do that with a Swiss ATM. I took Valerie into one of the private client salons and placed the envelope in her hand. She only cried harder when she opened it up.

  “You can’t do this, Bradley. I can’t accept it.”

  “You can’t not accept it, Valerie,” I said. “I told you when we came here together I’d take care of you, and I intend to keep my promise.”

  She hugged me, and I pulled away and went back up to my desk before the whole thing choked me up. But I was seething. Cheap bastard. This guy wouldn’t even pay to fix his own horrific dentition. Turns out that when it came to money, Bovay was so tight you couldn’t pull a needle out
of his ass with a tow truck. Ugly, spiteful, and cheap is a bad combination, eight days a week.

  It wasn’t long after that, early in 2005, that Bovay tried to pull the same thing on me. My annual bonuses represented eighteen percent of the revenues generated by my client accounts, as had been negotiated to lure me to UBS. I tracked the revenues carefully, down to the penny, knowing full well that Swiss bankers had never cheated anyone! So bonus day arrived, but the extra quarter million did not. I waited two days, until a few of my colleagues confirmed that their performance payoffs had come through. Then I sauntered into Bovay’s corner office, and I was cold as death.

  “Christian, I believe we’ve got an accounting issue.” I took out a slip of paper and squinted at it. “According to my calculations, there should be an additional 247,890 Swiss francs in my personal account. My bonus appears to be AWOL.”

  He scrunched his rat-like nose at me. “What does that mean?”

  “Absent Without Leave. In other words, missing.”

  “Let’s not make a fuss of it, Bradley.” He waved a dismissive hand. “I think you’re making quite enough.”

  I barely raised an eyebrow.

  “You know, Christian, you’re right. No need to fuss. You can either fix it right now, or discuss it with my attorney.” I pulled one of his business cards from the silver holder on his desk. “I’ll just give him your card so he knows how to reach you. In the meantime, you might want to pull out my contract.”

  And I left. Lo and behold, the very next morning my bonus was sitting in my account. But after that, and the thing with Valerie, the atmosphere around the Desk was sour as the stench of low tide. I found out that Bovay was screwing with everyone, not just me. It felt like our big happy family was starting to splinter under an abusive father. When that happens, it’s not long before folks get cannibalistic.

  One early evening in April 2005 I was sitting at my desk, thinking happily about doing a little clubbing after work with some friends. Then I felt someone’s presence at my shoulder. It was my buddy James Woods, a tall, bald Scottish guy with merry eyes and always a kind word for everyone. His brows were furrowed and he was creasing a sheet of paper in his fingers. He bent to me and dropped his voice.

  “Bradley, I think ya should have a bit of a look at this,” he said in his brogue. “It’s the top page of a three-page memo, internal.”

  I took the paper and looked at the title. “Cross-Border Business Banking.” It only took a few lines of reading for me to get the gist (Document 2). It was a ticking time bomb to all of us on the Desk. “Private Wealth Management personnel will not engage in the following activities.” Then the page had a list of activities that it was warning us not to do, though they were everything we were being paid to do! Excuse me? I snapped the sheet in the air like a whip.

  “Where the fuck did you get this, James?”

  “Found the bloody thing on the intranet.”

  “Show me! I’ve never seen this, and I sure as hell was never trained on it!”

  So he did. Now you can only imagine the size of the UBS intranet. For products alone you could go through a thousand pages, then all kinds of training materials, compliance forms, PowerPoint presentations, internal memoranda, worksheets, accounting records, and the annual report. You could have stuck War and Peace in there and no one would have found it! James took my mouse and guided me through his excavation, clicking on “International Private Banking,” then “Americas,” then “USA,” and finally, “Country Paper: New.”

  I took the mouse back and clicked. There it was, the whole Three-Page Memo, paragraph after paragraph in tight single space. Every word of it was a dire warning to all Private Wealth Managers on the Americas Desk:

  “PWMs shall not travel to the Continental United States for the purposes of seeking out American clients.… PWMs shall not propose products which fall outside the legal parameters of US tax regulations.… PWMs shall not engage in subterfuge while soliciting clients with marketing proposals in order to acquire Net New Money.”

  WTF?

  In other words, “Private Wealth Managers for UBS shall not do all the things we’ve been telling you and paying you to do for years, over and fucking over!”

  My hands were actually trembling as I read it. The firm we had worked for all these years and trusted with our futures was prepared to sell us down the river!

  “Shit!” I hissed. “I’ve never fucking ever seen this. Why didn’t they tell us they put this on there!?”

  James took the paper back from me. “That’s why I’m bringing it to your attention, lad.”

  “Okay,” I said. “Go back to your desk and we’ll talk about this later.”

  He left, and I sat there blinking at my computer monitor like some wife who’d just found a condom in her husband’s wallet. This couldn’t be right. It had to be some sort of “burn bag” draft, drummed up by the lawyers long before UBS had even thought of sending us out to be first-class pickpockets, and meant to be destroyed. Or it had to be some “watch your asses, boys,” warning they were going to issue, but decided it might curb our enthusiasm and had just filed it away. And then they’d decided to just go balls to the walls, train us all up on crypto and shaking tails and using pay phones and never, ever overtly breaking a law when we could just bend it a little and bring home the bacon. Right? James had just misunderstood the intent of this thing. Right? They wouldn’t sell us all down the river. Right?

  My gleaming blue eyeballs crawled up to the letterhead. But there was none. Almost always with such directives the blood-red UBS logo with its three skeleton keys was prominently displayed. This memo had nothing but “Legal and Compliance Department” on the header. That cleft between my eyebrows deepened like a fresh stiletto gash as I focused on the date. November 24, 2004. Two-fucking-thousand-and-FOUR. Long, long after we’d first started winging our way off to yacht races and golf tournaments, and almost half a year earlier than today’s date flicking at me from my monitor like some New England lighthouse. Right in the middle of the war, boys. Right in the middle of the bloody hunts for untaxable millions, the company’s lawyers had come up with this cover-your-ass document and buried it deep in their tight Swiss assholes where no one could ever find it!

  I read through it again, fast, while my cheeks burned and my nice white shirt collar squeezed my throat like a boa constrictor. I tore my tie knot open. Three whole pages of single-spaced legalese bullshit.

  “Don’t you dare do this, boys. Don’t you dare do that, boys. This kind of behavior is nothing that this upright, forthright, oh-so-squeaky-clean establishment would ever allow. And if you get caught doing any of it (even though we taught you exactly how to do it and pushed you out the door without a parachute), the Secretary will disavow any knowledge of your actions.”

  Just like Mission Fucking Impossible. I balled my fist and slammed it on my desk and a secretary jumped in her chair. I heard her say something to me but I didn’t even glance at her. My eyeballs were melting the monitor.

  Christian Bovay. That fucking slimy, rotten-toothed, dandruff-flinging scumbag. This was all him, all the way, and I cursed myself for not having tossed his office one night after he’d gone home. Who knew what else I’d have found in that asshole’s rat hole? Cocaine? A handgun and three forged passports? A thick Birkenfeld dossier with my mug shot and records of all the schemes I’d pulled off for him? Right now I was ready to bet every Swiss franc in my bank account that the fucker had a file on every one of us, just in case the Americans or Canadians came calling. And then he’d grin through that jail-door mouth of his and hand us all over, claiming he’d been running some internal corruption investigation all along. And then you know what? He’d whip out this Three-Page Benedict Arnold shit and wave it around as proof that we’d all been warned to never flout the laws!

  That bastard Bovay was like Satan. And what did that make me? A trusting, naive dupe. Nothing more than Lucifer’s fucking banker.

  I snapped my head around to his off
ice. Empty. Dark. Door locked. The lucky fool had already gone home, because if he’d still been in there, I would have taken his Swarovski-crystal ashtray and buried it in his head. I was breathing like a marathon runner as I stabbed my keyboard and the printer spat out the three pages of doom. Then I folded the printout, stuffed it inside my suit jacket, shut down the computer, got up, threw my scarf around my neck, and shoved my chair against the desk, where it banged like a car bumper. The chatter in the room had frozen, I could feel the eyes on me, but all I could see was a tunnel of red and that big glass door at the end of the corridor. All I heard as I smashed it open and stormed into the night was my own curdled voice hissing.

  Motherfuckers!

  CHAPTER 6

  COUNTERPUNCH

  “I don’t know what’s going to happen, man,

  but I just want to get my kicks before the whole

  shithouse goes up in flames.”

  —JIM MORRISON, THE DOORS

  I KNEW THE VULTURES had finally come home to roost.

  My head was reeling as I stormed out onto Rue du Rhône, and I suddenly stopped, not knowing which way to turn or where to go. I flipped open my cell phone and blew off my drinks and dinner partners, although God knows I needed at least three stiff belts of one hundred-proof something. But I decided to walk it off instead. I needed to think, and think clearly. It was a cool spring evening, the lights flickering from the roof gardens of the luxury hotels across the lake and some sort of classical concert wafting over from the water-side promenade. I didn’t really see or hear any of it. I just walked the cobblestone streets, passing through crowds of spring revelers as if they were ghosts while I smoked, pondered my ugly twist of fate, and tried to cool down.

  “Take it easy, Birkenfeld,” I said to myself. “Let’s logic this one out.”