Lucifer's Banker

  But I hadn’t gotten to be a globe-trotting, high-risk-taking, extremely successful private banker by being as sweet and naive as Mary Poppins. Something was rotten at UBS, and though I’d had a gut feeling about it for some time now, I’d suddenly bitten down on a nauseating chunk. But could the whole secret memo thing be a simple mistake? Was I jumping the gun? Maybe in fact that memo had just been a draft of something, an idea cooked up by some young legal intern and mistakenly dropped into the computer system. Or maybe it had been drummed up by some pissed-off, underpaid employee who just wanted to stir up trouble. Planted like an anti-tank mine until someone like me ran over it and … “Boom!” I mean, would Christian Bovay and Martin Liechti really set us all up like that? We were all making a fucking fortune for the firm. Would they throw their best moneymakers under not merely a bus, but a bullet train?

  “Yes they would.” The ugly conclusion suddenly escaped from my mouth. “In a fucking heartbeat.” The heat was on, the United States and Western European “Feds” nosing around and applying pressure all over the world. It could all blow up any minute, and the Swiss Mafia at UBS wanted their asses thoroughly covered. What did they care about us? All of us bankers on the Americas Desk could get hanged by our thumbs and they’d still be making their comfy Swiss salaries. I knew there were very few honorable men in banking, and no heroes. If you think otherwise, just have lunch sometime with your local mortgage loan officer.

  It started to rain. I tossed my cigarette in a puddle and it hissed like a snake. Those were the kinds of people I was dealing with, pit vipers, so I walked on home to plan how to cut their heads off.

  It was cool enough in my flat for a fire. I stoked up the hearth, kicked off my shoes, poured myself a huge tumbler of Johnnie Walker, and hunkered down on my green leather couch, watching the dancing flames. I thought about calling my brother in Boston, but I knew Doug would tell me to fold up my tent and get the hell out of Switzerland. He’d probably have been right, but running wasn’t my style. I’d worked too hard to build a career in Geneva, and if I was going to leave UBS, it would be as General Sherman in the Civil War blazing a path to Atlanta.

  But it had to be calculated, carefully planned, no shots from the hip. I hadn’t studied all the great military tacticians in college like Patton and Rommel for nothing, and I’d learned plenty of business law maneuvers in graduate school. My execution would have to be precise, like a master chess player, with every response anticipated if I was going to save my own skin and those of my colleagues. After a couple of hours of drinking, and two fat Cohibas burned down to the nubs, I’d eliminated all the harmless theories about that memo and arrived at that stop called “Hard Truth.” At any minute, my two-faced bosses might turn my colleagues and me in to the American authorities, while claiming they’d forbidden our practices all along. That’s what that Three-Page Memo meant.

  Finally, I went to bed. Some people don’t sleep well on the cusp of a life-altering confrontation. But I slept like a sniper, refueling my strength, locked and loaded.

  The next morning at nine sharp I came barreling into Christian Bovay’s office like a steaming bull. He jerked back in his chair as I slammed the door, slapped my copy of the Three-Page Memo on his desk, and bent over, knuckling the gleaming wood.

  “What the fuck is this, Christian?”

  He raised one hand as if to ward off some demon, craned his neck, and squinted down at it. Then he nodded, sat back, and smiled with those burglar-tool teeth.

  “It’s nothing that should concern you, Bradley.”

  “Nothing that should concern me?” I leaned in further. “Really?!”

  “Yes, really.” He was trying to avoid my eyes, which were probably gleaming like charcoal briquettes. “There’s no need to make a stink. It’s not that big of a deal.”

  And that’s when I reached out, grabbed him by the collar, and yanked him right out of his chair. We were nose to nose and my other hand was cocked in a fist.

  “Fuck you, Christian!” I hissed in his face. “It’s not a big deal? It’s a huge fucking deal!” I jabbed my finger at the memo. “You’re exposing all of us to this shit. And we’re all exposed. Not just me, but my colleagues, the clients, and all our fucking shareholders! Right?”

  I could feel him trembling in my tight grip. I was a lot bigger than him and he knew I could just pick him up and throw him right through his fancy picture window. He mumbled something about not getting all emotional over standard office procedures and practices, but the blood was pounding so loud in my ears I could barely hear him. My assault had been calculated, but my fury was all too real.

  “You know what, Christian?” I said as gripped him close enough to bite off his nose. “Go fuck yourself.”

  I dropped him, swiped the memo from his desk, stormed out, and slammed his door behind me. The first pair of eyes I saw were Valerie’s, staring at me from behind her desk as if she’d just heard a lion ripping her boss into deli slices. Then I realized the entire floor was deathly quiet and all the bankers and assistants had frozen in the exact same pose. I straightened my tie, grinned at them, and said, “Bonjour, mes amis. It’s a lovely day today!”

  Then I weaved my way over to my own desk, sat down, took off my suit jacket, and lit up a cigarette. Jacques Leuba appeared with a steaming mug of coffee and set it down in front of me.

  “I should probably have poured a shot of bourbon in that, but it’s early,” he said. Then he perched on the desk corner. “Do tell, Bradley.”

  “Thanks, mon ami.” I took a long sip and handed him the pages. “Take a look at this.”

  It didn’t take long for Jacques’s eyes to widen, and then he was flipping back and forth through the pages, as if trying to figure out if the thing was some sort of a prank. Then James Woods showed up, who’d discovered the dastardly thing and already knew what it was all about. He cocked an eyebrow at Jacques.

  “That’s a bit of prickly shit, isn’t it, Jacques? Found the bloody thing on the intranet.”

  Then my buddies Angel Gomez and Stephan Mundwiller showed up, each of them taking a read and glancing at each other and whispering, “What is this shit?”

  “It’s our death sentence, boys, you better get measured for your coffins,” I said.

  “When did this go up, Bradley?” Jacques asked.

  “It says November,” I said. “But who the fuck knows? It could have been up there for years. And it just says ‘November 2004 version,’ which implies it’s gone through who-the-fuck-knows-how-many iterations. Notice there’s no letterhead? Notice our UBS ‘Three Keys of Corruption’ logo isn’t anywhere on it? It’s a UBS cover-their-asses document for a rainy day. We all drown, while they stay nice and dry under their gold bullion umbrella.”

  “So what does this mean, Brad?” Angel’s dark brows were scrunched up together like a pair of crow wings. In just two weeks, he and Stephan were supposed to be taking off together on one of their hunter-gatherer excursions, to Dallas and Miami, respectively.

  “It means, amigo … that we’re all fucked. The party’s over.”

  The guys wandered off, back to their desks, shaking their heads and muttering to each other. James was the last to go, and before he did I grabbed his elbow.

  “Listen, dude,” I said. “You need to get off the Americas Desk. Transfer out to something else, like maybe South Africa. And I mean like ASAP. Got me?”

  He nodded solemnly. James didn’t need to be warned twice.

  “And where are you going, Brad?”

  “Nowhere, for now,” I said. “I’ve got some studying to do.”

  “Sun Tzu, perhaps?”

  I smiled at him. “That’s right. The Art of War.”

  James smiled back and left, but I could see he was shaken up. And me? I was stirred, but not shaken. I knew what I had to do next. I wasn’t going to just walk off the job. If I did that, and suddenly the whole thing went belly-up, any investigators looking into UBS’s nefarious practices could still find me complicit, an
d I’d have no proof that I’d ever protested or done a damn thing about it. I’d have to make a stink, all right. However, first rule of discovering a corporate crime: Gather the evidence and store it safely.

  So, over the next couple of weeks, I acted like I’d gotten over the “memo incident.” I went through all the motions of seeking Net New Money clients and servicing the ones in my book. I made my slews of phone calls, propped my feet on my desk, smoked and drank in the office like everyone else, and cracked the requisite number of Birkenfeld off-color jokes. I even treated Bovay with courtesy, letting him think I’d just had a temporary tantrum.

  Meanwhile, I was quietly collecting evidence in order of priority for my plan of attack. First thing I did was to gather up copies of all of our in-house Security and Compliance training modules; basically the UBS handbooks on how to discreetly solicit North American clients while making sure the US authorities got left in the dust. After that, I went through years of my computer records and email, saving all the “Push harder! Bring in more Net New Money!” memos from Liechti, Guignard, Bovay, and even the higher-ups like Raoul Weil. Then I assembled my own clients’ records, as well as a few big fish handled personally by Bovay, which I managed to get access to in his safe, and made sure the enormous amounts of secret account holdings were tagged to each record. All of these things I made copies of and walked them out of the bank. I took them home and spent long nights drinking, smoking, and listening to my favorite jazz as I reviewed the extensive documentation of UBS’s illicit practices.

  I didn’t party much during those few weeks, just here and there to keep up appearances. And although I knew that my days at UBS were numbered, I planned to leave on my own terms when the time was right. I’d already decided that I was done with private banking forever. It had all been a fun, wild ride, but how many times can you woo some client into investing in stocks, bonds, currencies, or gold bullion before you eventually lose your enthusiasm? I was ready to progress into private equity, using all the contacts I’d made over the years to put big moneymakers together for partnerships and then take my cut of whatever that new endeavor might be. I knew plenty of people with great ideas for start-ups, such as new energy or biotech firms, or proposals for constructing resort hotels in prominent locations. I also knew plenty of others looking for such investments. I’d put them together, and get my cut for the matchmaking plus stock options in the new entities. Do that just a few times successfully and you’re set for life. I knew I’d be successful, and I’d no longer be reporting to corporate ingrates.

  It was mid-May 2005, just as I was feeling pretty good about the amount of backup material I’d gathered, when Igor Olenicoff got busted in California. That was definitely an “oh shit” moment. I had called him up from a public pay phone, standard practice with those “types” of clients, just to consult with him about a particular investment.

  “I cannot speak to you now,” he said in a low, guarded tone, and he didn’t use my name. “The IRS is here in my office … with a SWAT team.”

  The phone went dead and I looked at it as if it had suddenly turned into a shrunken head. Did he actually say “SWAT team”? Holy shit. The wolves were at the door, and Olenicoff had just been first-bitten. The odd thing was, he’d pretty much predicted it would happen.

  A few years prior, Olenicoff had acquired a 120-foot yacht that he christened Rusalka (Exhibit 12). Some Japanese power players had built this beautiful vessel in the hopes of taking it to the America’s Cup and using it as the flagship for the festivities; that venture had failed, maybe because the Japanese haven’t sailed very well since the Battle of Midway. At any rate, Olenicoff saw it sitting in Tokyo harbor, paid hard cash for it, and had his boat captain drive her to California and then through the Panama Canal to Florida, where I’d had drinks on the yacht with Igor and a bunch of pretty people at the Palm Beach Boat Show. In the spring of 2004 he’d called me up and said, “Bradley, I am taking the Rusalka for a wonderful cruise to Guatemala, Honduras, and Belize. Why don’t you and Mario come along?”

  “Lovely!” I’d said, and I called up Mario Staggl, who’d arranged for all of Olenicoff’s offshore structures, and we flew off to LA and then all went to Central America together. By that time Mario and I had become more than just business acquaintances. His Liechtenstein trust company was at the top of its game, and on multiple occasions I’d delivered my clients and their money into his hands for safekeeping. Every time Mario formed a trust structure for one of my clients, he and his partner, Dr. Klaus Biederman, who’d actually written the comprehensive book on the trust laws for Liechtenstein, got very well paid for their services. I, in turn, was rewarded by Mario with gifts of appreciation, often fat envelopes containing 50,000 Swiss francs (they were untaxable, by the way). In between deals we’d partied together, gone skiing in Zermatt, strategized in London, and attended the Venice Film Festival and other high-roller events all over Europe. Mario was a brilliant CPA, fashionable and funny. He looked a little like Eddie Munster and belly-laughed like Buddy Hackett.

  So we were down in Central America, having a great time on Olenicoff’s yacht, until one evening off the coast of Belize the “Mad Russian” took us aside.

  “Gentlemen,” he said in his Boris Yeltsin lilt, “I must tell you that these ventures of ours may be drawing to a close.”

  “What makes you say that, Igor?” Mario asked.

  “Let us just say that I believe I am being looked at.”

  “Little gray tax men?” I asked as I sipped my scotch. The breeze was beautiful and the fragrance of the sea permeated the air.

  “I am a billionaire, Bradley.” Olenicoff smiled and shrugged. “Men who make pennies as government employees are not enamored of men with yachts. We should consider moving my money out of UBS.”

  “Well, that’s easy enough to do,” I said. “Right, Mario?”

  “Child’s play,” said Mario.

  “Whenever you like, Igor,” I said. Although truthfully, I was hoping the heat would cool down and he’d change his mind. If he moved his $200 million out of UBS, my own bonuses would take a nosedive. However, keeping clients safe and happy was always the prime objective. If you gave them bad advice, you’d soon be clientless.

  “I shall let you know.” Olenicoff smiled and waved at his other guests, a gaggle of old fraternity brothers having drinks near the wheelhouse. “Let’s go watch the sunset.”

  But he hadn’t pulled the trigger back then, and now the trigger was being pulled on him—by dudes with big guns and helmets. I could just picture them rifling through his office, walking out with computers and reams of paperwork, and I wondered if my name would pop up anywhere as they pored over all of it back in Washington. But I wasn’t too worried. I was just the go-between, and a protected Swiss banking employee at that. Olenicoff was the money guy, responsible alone for his taxes. Whether or not he paid them was not in my wheelhouse, or so I thought at the time. It didn’t cross my mind that if the Feds hit him with some sort of indictment, he might panic and start finger-pointing … at me.

  Anyway, after that phone call with Olenicoff I rang up Mario and warned him. “Stand by for action, buddy. Igor’s getting some serious heat in California.”

  But it didn’t faze Mario. He was successful, wily, had scores of super-rich clients like Olenicoff, and was perfectly safe and comfortable in Liechtenstein, where the banking laws were even more covert and rock solid than in Switzerland. Then I told him about the Three-Page Memo, and that he should keep it under his hat.

  “I’ve never cared much for the Swiss,” he said.

  “I’m learning to hate them myself.”

  “Well, you’ll always have a home here in Liechtenstein, Bradley.”

  “Thanks, but I’ve still got irons in the fire.”

  “Of course.” Mario knew I wasn’t the type to just turn the other cheek.

  As the month of June rolled around, it was time for the second phase of my tactical gambit. I didn’t know whether Christian
Bovay had passed on my concerns to his superiors, but given the slimy bastard’s nature, I figured he’d kept it to himself so that nothing would impact his moneymaking fiefdom. It would be up to me now to undertake an in-house protest. “I know what you guys have been pulling here, and now you know that I know. So come clean.”

  I sat down at my desk and wrote a memo to the UBS Head of Legal, Rene Wuethrich, and the UBS Head of Compliance, Philip Frey. With it I attached a copy of the Three-Page Memo.

  Dear Rene,

  I am contacting you regarding a very serious matter that has a variety of negative consequences and I wanted to ensure that I made you aware of this, as well as ensuring I am in total compliance with the policies and procedures of UBS as a Director.

  I was on the UBS intranet website (Wealth Management International, Americas International, QI–deemed sales, Country Paper USA new) and read a very lengthy and legal document (please see attached), covering the market I presently cover—the United States of America.

  Please respond back to me, as I feel this should be given immediate and top priority, not just for me, but for my colleagues in Geneva and Zurich too! Thank you for your expertise and time in this matter.

  Best regards,

  Bradley C. Birkenfeld

  Director

  I hit the “send” button and waited. And then I waited some more. Honestly, I expected some sort of reply, at the very least a summons to a quiet consultation during which Wuethrich and Frey would try to assuage my concerns. Nothing. Nada. After a week I realized they were going to just blow me off. “Okay, boys. Wanna play the stone-wall game? I’ll hit you again, just when you think I’ve given it up.”

  Meanwhile, Olenicoff called me up and told me he had decided to move his money out of UBS over to a much smaller bank in Liechtenstein. I had to admit the guy had balls, calling me on an open line like that after the Feds had already tossed his offices and were most likely tapping his phones. Or maybe he figured the jig was up anyway and he wasn’t going to be able to hide his assets, so he might as well move them to somewhere even safer than Switzerland. The Liechtensteinians were even tougher than the Swiss when it came to outsiders screwing with their private business, and Mario knew bankers who’d die before talking to American tax authorities. Mario, as the trustee, told Olenicoff that he’d give him a full accounting of his assets and wire the goods on his orders.