In May, Downing at last contacted my attorney, David Meier, with some begrudging news. It seemed he’d run out of fairytales and hapless excuses and couldn’t figure out a new way to torment me further. The Southern District of Florida had set a firm date for my sentencing hearing, August 21, 2009, and refused to entertain any further delays. Downing had never let the law impinge on his behavior before, but he was fresh out of ammo. It meant another three months of waiting for us, but we’d been preparing for the fateful date for nearly a year.
“It’s about fucking time,” I said to Meier. “Batter up.”
The day before my court appearance, I packed a small bag and got on a plane to Fort Lauderdale. I knew I wouldn’t be there long.
My fate had already been sealed by a rigged system.
CHAPTER 13
SCAPEGOAT
“It is to be regretted that the rich and powerful
too often bend the acts of government to their
own selfish purposes.”
—ANDREW JACKSON,
AMERICAN PRESIDENT
IT WAS A PERFECT day for a hanging.
Fort Lauderdale in August felt like the closest spot on earth to the sun. The rows of hotels along the beachfront glistened so brightly they were painful to look at, and the roads shimmered like desert mirages. Not a palm frond moved, the air tasted thick like steam mixed with sea brine, and the white-sand beaches were nearly empty because you couldn’t plant a foot without wincing. But all of that didn’t matter to me much, because all I really saw was the downturned mouth of Judge William Zloch.
As Zloch strode out from his chambers to the bench, I knew I’d made the correct decision about entering my plea before Magistrate Seltzer: Guilty as charged. Zloch was tall and rock-jawed, with lizard green eyes and a shock of thick blond hair. I’d done some research before showing up in his jurisdiction, and I knew he’d been a quarterback for Notre Dame and a Navy lieutenant in the waning days of Vietnam. He also had a reputation as a surly egomaniac; even his closest associates called him intense and overbearing. Lisa Arrowood, a senior partner in David Meier’s firm, had referred to Zloch as a “real asshole.” He had a penchant for verbally decapitating defendants and lawyers.
Two camps faced Zloch in the kingdom of his courtroom. On the left stood mine, including me, my attorney, David Meier, and one of his local associates. On the right stood “Government,” as Zloch would address them: Kevin Downing, Jeffrey Neiman, and a third prosecutor, Michael Ben-Ary. I wasn’t sure what Ben-Ary was doing there, except that maybe Downing wanted to keep the odds even, or have someone handy to fetch him lemonade.
There were no witnesses. You don’t need witnesses for a lynching. The courtroom gallery was packed with members of the media, but the only friendly observer was my brother Doug, who’d come along to support me. I could feel the intensity of his energy behind me, but no matter what happened, I knew he wouldn’t be able to say a word.
The proceedings opened without any raised right hands or oaths to God to tell the whole truth and nothing but that. Kevin Downing and his deputies would be doing most of the talking, and it’s a given that government prosecutors will never, ever lie.
There’d been a series of motions between Downing and the Court, as well as David Meier and the Court, prior to us showing up for game day. Downing had submitted a lengthy sentencing memorandum, in which he’d lobbied for a fat chunk of jail time. He claimed in the memo that after my guilty plea he’d allegedly discovered many more crimes I’d committed, particularly with my coconspirator, Mario Staggl (I hadn’t been able to keep Mario out of it, because he’d already been named in Olenicoff’s confession). It was easy to turn Mario into a supervillain like Dr. Evil, because he wasn’t there to defend himself, and never would be. When Zloch asked Downing how he’d made these discoveries, Downing said with a straight face, “Mr. Birkenfeld told us about them.”
Zloch didn’t even blink at that. I assume by now you’ve noticed that whenever someone in this story asked how the government managed to crack the code of secret Swiss banking, the answer has always been “Bradley Birkenfeld.”
David Meier had submitted our own sentencing memorandum, along with a slew of supporting letters from my “fans.” These weren’t just cranks, or whiz-kid bloggers who read the Financial Times, but powerful people in government who knew what the hell they were talking about. The first one was from Senator Carl Levin (Document 5).
“Mr. Birkenfeld initiated contact with the Subcommittee and subsequently provided testimonial and documentary information related to his employment as a private banker at UBS in Switzerland.… Throughout the Subcommittee investigation, which lasted over 14 months, Mr. Birkenfeld voluntarily made himself available for additional staff interviews and provided additional documents to the Subcommittee.… The information provided by Mr. Birkenfeld has been accurate, and enabled the Subcommittee to initiate its investigation into the practices of UBS.”
In other words, “We couldn’t have done this without him, so give him a fucking break.”
Yet another letter had been sent directly to Judge Zloch from Robert Khuzami, Director of the Division of Enforcement of the Securities and Exchange Commission.
“I am writing to provide the Court with information about Bradley Birkenfeld that the Court may wish to consider in connection with the sentencing of Mr. Birkenfeld.”
Khuzami went on for two pages, detailing my repeated voluntary whistle-blowing cooperation and multiple meetings with the SEC, and how all of that had resulted in a successful civil suit against UBS, plus preventing the bank from further violating federal securities laws, and bringing in $200 million to the SEC in penalties.
“For these reasons, we would characterize Mr. Birkenfeld’s cooperation as significant to the Commission’s investigation. I hope that the information in this letter is helpful in determining the appropriate sentence for Mr. Birkenfeld.”
In other words, “I hope you’re not going to be so stupid as to punish a real American tax hero.”
Well, hope springs eternal, but it was clear to me that none of that had mussed a hair on Zloch’s head. Steve Kohn, writing from the headquarters of the National Whistleblower Center in Washington, DC, had sent a voluminous report to the Senate detailing the DOJ’s incompetence and corruption in handling my case and the nefarious practices and, yes, lies that had been used to tar and feather a stand-up whistle-blower. Kohn had urged the Senate to intervene on my behalf, and Carl Levin had done just that. None of it helped. I figured Judge Zloch was a Republican.
So the wrangling began. But it wasn’t about whether or not the defendant, me, who’d bounced from one government agency to another over and over, risking his life and career to help the US government crack the case of unabashed Swiss crimes, should actually be shown some consideration and get no more punishment than Igor Olenicoff had. It was all about the length of jail time I was going to serve. Honestly, when the first figures Judge Zloch uttered were “70 to 87 months,” I felt a little weak in the knees. Seven years?
Downing, just to look good and merciful, had prepared a motion for a downward departure (less time) from the maximum years I could get, according to sentencing guidelines prescribed for these kinds of cases. I knew that was all for show—if it were up to him, he’d put me away for life. Zloch ignored the motion. He didn’t need any pissant lawyers telling him what to do, but still he was pretty savvy. Judges are political animals, and he knew that whatever he decided was going to be plastered all over the newspapers.
“Well,” Zloch said to his prosecutors, “the advisory guideline range at this point is 70 to 87 months. However, the maximum penalty that can be imposed is 60 months because that is the statutory maximum … The Court is never allowed to go higher than the statutory maximum, under no circumstances. So, the guideline range could be 200 months to 250 months, and since the statutory maximum is 60 months, the Court cannot go higher than 60 months.”
Downing wasn’t happy with that, but he
was stuck between a rock and a hard place. I knew he had wet dreams about me hobbling out of prison twenty years down the road with a long white beard like Rip Van Winkle. However, since I was the only guy on earth who could still help the government with the UBS case, he’d be needing my cooperation even after the sentencing. In order to get it, he’d have to file for a 5K1 motion, under which a court can ignore the sentencing guidelines and statutes. If he didn’t file for it, I could tell him to fuck off and never talk to him or anyone else in the government again.
I actually found myself slightly relieved. Things are pretty bad when you get a happy jolt from hearing you might only do five years in prison.
Zloch instructed Downing to make his case. As Downing proceeded, I witnessed his rare talent of being able to talk out of two sides of his mouth. He performed like a ventriloquist holding a dummy that contradicted everything he said.
“Your Honor, after Mr. Birkenfeld was arrested and an under-seal indictment was unsealed,” Downing said, “Mr. Birkenfeld immediately began to cooperate with the United States government and provide detailed information about his personal involvement with what is now known as a massive tax fraud scheme that was committed by UBS’s executives, bankers, and others against the United States government.”
Right off the bat Downing was twisting the truth, trying to make it look like the shock of my arrest had made me talk. But he knew that I’d already been babbling about the whole thing for a year before his goons cuffed me in Boston, so the other side of his mouth started to chatter.
“Prior to his arrest,” Downing went on, “and in particular in the summer of 2007, Mr. Birkenfeld came to the Department of Justice and started to lay out the parameters of this fraud scheme, gave some information about the individuals at UBS that were involved, and talked in rather detailed fashion about the parameters of the scheme and how it was conducted.”
Okay, I thought, maybe he’s actually going to ease off on me, probably because he knows Judge Zloch can ask for his records of my interviews.
“Mr. Birkenfeld at that time also provided documents to the United States government. So in June of 2007 the US government was in a position to approach UBS, to request that they begin to provide information about its fraud scheme, and that in fact did occur.”
Hey, maybe he’s decided he likes me? Maybe he realizes how good I’ve made him look? Nope; not so fast. The “dummy” took over.
“Unfortunately,” Downing continued as if the whole thing was just so sad to him, “when Mr. Birkenfeld came in, in the summer of 2007, he did not disclose to the United States government his own personal involvement with that fraud scheme.”
What? I didn’t tell you I was one of the UBS managing directors making it all happen? I told you I was just the fucking janitor, right? I just happened to witness all this shit while I was cleaning the bathrooms!
“Nor did he in particular give any details with respect to what is now publicly known to be one of his clients, Mr. Olenicoff, who is one of the largest clients at UBS that was involved with this tax fraud scheme.”
Because you wouldn’t give me immunity or a subpoena! That’s why I spilled it all to the Senate instead of you! I felt the blood rushing up to my face and I wanted to scream out in Court, “Goddamn liar!” David Meier must have sensed it because he gripped my arm to keep me steady and silent. Judge Zloch interrupted.
“Just for a reference point,” he said to Downing, “what did Mr. Olenicoff end up paying by way of back taxes, interest, and penalties?”
“I think in total it was approximately $53 million, Your Honor.”
It was a lot of fucking money, and I saw Zloch raise an eyebrow, almost as if wondering himself why this prosecutor wanted his lottery ticket locked in a slammer. Downing must have realized he was appearing vindictive, not to mention ungrateful.
“I will say,” Downing conceded, “that without Mr. Birkenfeld walking into the door of the Department of Justice in the summer of 2007, I doubt as of today that this massive fraud scheme would have been discovered by the United States government.”
You slimy bastard. So you should be dropping the charges, right?
“Moreover, by allowing us to begin our investigation back in June of 2007, that investigation now has resulted in not only changing the way in which we obtain foreign evidence from banks in Switzerland, it has caused the Swiss government to come and enter into new tax treaties with the United States government through which the United States government will now obtain tax information in civil tax cases, which never happened before, and more readily obtain them in criminal cases.”
At that point my head was swimming. Downing’s testimony was totally schizophrenic. Love me, hate me, trash me, tout me. But then came the kicker.
“And, if I might, Your Honor,” Downing now said in this phony, almost mournful tone, “but for Mr. Birkenfeld failing to disclose his involvement with the fraud and the US clients that he aided and assisted in tax evasion, I believe we well would have non-prosecuted Mr. Birkenfeld.”
What? You could have had every name on the first day we met. All you had to do was issue a subpoena or a grant of immunity. But you fucking hate whistle-blowers and that’s why you prosecuted me!
“But given the fact that he refused to provide that information and led us down a course where we had to start to investigate Mr. Birkenfeld and his activities, that is why we are here today, that is why he was indicted, and that’s why he pled.”
Bullshit! I pled because I’d already told you about everything I’d done and I wasn’t going to pretend that I hadn’t. It’s called integrity. Look it up. But not in the DOJ handbook. You won’t find it there.
Zloch then asked Downing how many tax-evaders had been snared due to my testimony, and Downing had no choice but to admit I’d delivered my entire portfolio.
“Now, you said something that has great significance,” Zloch said to Downing, “and I just want to make sure that I am clear on your statement. And that is that but for Mr. Birkenfeld, this scheme would still be ongoing?”
Since Carl Levin had already stated exactly that in his letter, Downing couldn’t refute it. It must have tasted like Liquid-Plumr® drain cleaner as he cleared his throat and confessed.
“I have no reason to believe that we would have any other means to have disclosed what was going on, but for an insider in that scheme providing detailed information, which Mr. Birkenfeld did.”
Both Downing and his “dummy” were babbling simultaneously now. “He did provide it! No, he didn’t!” I was shaking my head, thinking that what he really needed was a court-appointed therapist. But then he stuck the knife in my ribs because he just couldn’t help himself.
“I do know when Mr. Birkenfeld came in the door, he seemed to be motivated by the new whistle-blower statute that applies to tax cases.”
Piece of lying shit! What Downing failed to share with the judge is that I had retained my attorneys to contact the DOJ regarding UBS and other Swiss banks in mid-2006, long before the IRS whistle-blower statute became law. He had to paint me as some sort of greedy scumbag to make sure Judge Zloch didn’t suddenly turn around and toss the case out of court.
“But again,” Zloch pressed him, “but for Mr. Birkenfeld this scheme would not have been discovered by the United States government?”
Downing nodded. “I believe that, Your Honor, yes.”
Well, at least it was now all stated and recorded, in perpetuity, in the official legal proceedings of a federal district court. “None of this could have happened without Birkenfeld.” But that fact still wouldn’t have any impact on my sentencing if my lawyer couldn’t pull a rabbit out of his hat. Now it was David Meier’s turn.
“Your Honor, on behalf of Mr. Birkenfeld, I appreciate Mr. Downing’s candor and forthrightness with the Court with respect to the general role or the characterization of Mr. Birkenfeld through all the responses to the Court’s question.”
In other words, Your Honor, when you forced Downin
g to tell the truth about Brad’s central role in this international tax case, he got cornered and had to.
“As I have set forth on behalf of Mr. Birkenfeld in his sentencing memorandum and the attached exhibits,” Meier continued, “and the Government in its 5K1 motion details, I respectfully suggest that based on these facts and circumstances the Court ought to grant the motion and depart downward.”
In other words, since everyone knows what’s going on here, let’s get off this nonsense about a seven-year sentence and talk turkey.
Zloch agreed with Meier’s plea. “The Court finds that Mr. Birkenfeld has rendered substantial assistance to the United States government. The Government concedes that point. Accordingly, the Court will consider a departure below the advisory guideline range.”
That sounded pretty good. But then he added, “Having granted the government’s motion, the Court reserves the right to impose any sentence authorized by law.”
Uh-oh …
Zloch called me up to the podium. I’d seen enough real trials on TV to know that this was the part where anything could happen. I was cool on the outside; no sweaty palms. But inside my head the thoughts were careening around like pinballs.
“Good morning, Your Honor,” I said.
Zloch didn’t return the greeting.
“Bradley Birkenfeld, you now being again before this court, and you previously having pled guilty to the offense charged in the one-count indictment of the United States of America vs. Bradley Birkenfeld, and the Court having previously adjudged you guilty … Do you or does anyone on your behalf now have any legal reason to show why the sentence of the law should not be pronounced upon you?”
Lucifer's Banker Page 26