“Welcome to Camp Cupcake, brother!” I’d say with a wide happy grin, and then I’d turn to the families. “Hey, folks, don’t you worry about him. This place is easy breezy!”
The goons didn’t like that much. After a while they told me to stand aside and shut up.
“What are you going to do?” I needled them. “Give me three more years for being too nice to people?”
They could have locked me up in solitary again, but truth be told, I intimidated the hell out of the staff. They all knew who I was and I’d hear their murmurs as I walked on by. “That’s the banker dude who had the press conference outside.” About a month before my incarceration, 60 Minutes had done a big story on my case. Steve Kroft interviewed me at the Boston Harbor Hotel, and even though he did his best to edit the piece so I’d look like a scumbag, my message about being the DOJ’s fall guy still came through loud and clear. At any rate, after that the media kept clamoring to hear my story. About every three weeks, some crew from CNBC, Swiss TV, or journalists from the Financial Times or Wall Street Journal would show up at Schuylkill for an interview in the visitation room. The prison staff was scared shitless that I’d badmouth the joint, so it was “hands off Birkenfeld.”
Plus, I kept the pressure flowing from my attorneys to the various government bodies I’d helped with the whole Swiss banking scam. Steve Kohn from the National Whistleblower Center was an expert at demanding true justice, and expressed his outrage on a regular basis. I don’t know exactly how many letters he and Dean wrote, but I think the pile was thicker than the Tax Code (Document 7). I’d suddenly get a call to come down to the prison’s “Camp Counselor” office.
“Yes, ma’am?”
“Is everything all right, Mr. Birkenfeld?”
“Everything’s peachy. Why do you ask?”
“Well, Senator Kerry’s office called yesterday, inquiring about your welfare.”
“My welfare’s fine, although I think those coffers have been abused by socialists and irrevocably bankrupted by the national debt. How’s yours?”
They fucking hated having me there, and I loved that. I wasn’t going to let prison change my outlook on life, which had always been about turning mud into money and having fun at every turn. Sure, some guys were jealous of my status, which might have appeared to be “white privilege,” and a few of my African American and Latino camp mates grumbled about my role as a government “snitch.”
“Park the attitude, brother,” I’d say. “If I’m so dirty, what the hell am I doing in here with you?”
Then some inmate would say, “You just disrespected me!”
I’d counter with “I would need to respect you first before I could disrespect you now, which I never did!”
That shut them up, and it was pretty smooth sailing once I set them all straight.
About two years into my bid, Steve Kohn and Dean Zerbe came down for a discussion with me in the visitation room. We’d been having telephone discussions about my application for an IRS whistle-blower award, but up until that point I still thought it was pie-inthe-sky. This time something seemed different.
“We’ve finished our brief,” said Steve.
“Filed it with the IRS,” said Dean.
“How brief is it?” I asked.
“All told?” Steve smiled. “About two hundred pages, and half of it’s sworn affidavits or signed testimony from high-caliber government people: Levin, Grassley,3 Khuzami.”
I whistled. “That’s pretty hefty, especially for something called brief.”
“We’ve also got supporting testimony in there from IRS investigators,” said Dean. “It’s going to be pretty hard for them to argue against their own agents.”
“Okay,” I said. “So what are we looking at?”
“Well …” Steve grinned and adjusted his smart-guy spectacles. “UBS paid out $780 million. Something north of $200 million of that went to the SEC, so that doesn’t figure in the IRS calculations. That leaves about $580 million to work with. We’re looking at somewhere between fifteen and thirty percent of that.”
I blinked, and as I leaned my head closer across the table, they dipped theirs in too. Now they were grinning like Cheshire cats.
“You’re telling me,” I whispered, “we might get … $50 million for an award?”
“We’re thinking it’ll be closer to $100 million,” said Steve.
I blew out a long breath, gripped both their shoulders, and sat back.
“You guys can come visit me down here any day! My home is your home!”
At that point I had about six months left in my bid. Time flies when you’re having fun, and two years had gone by quickly. Honestly, I think that my prison term was somewhat karmic, if you believe in that sort of thing. For anyone else, it would have been the low point in their lives, but for me it provided an unvarnished look at how things really work in the land of the free. Plus, after years of swinging my sword at government dragons, it was a warrior’s vacation. Most folks thought of it as hard time; I thought of it as downtime.
I guess I don’t have to tell you that after Steve and Dean’s visit my demeanor, which was already chipper, got obnoxiously arrogant as far as the Bureau of Prisons was concerned. I rubbed my good fortune in everyone’s faces. Some of my fellow inmates thought I was spinning a fairytale, like I’d gone off my rocker in stir. But the smarter guys who knew me well were convinced I was telling the truth.
“Think you’re really going to be rich after this?” Cliff asked.
“Baby, when you get out, we’re going to party on a yacht full of Playboy bunnies.”
Cliff laughed, but his eyes gleamed like he was already there.
As for the prison staff and guards, they became even more surly whenever I was around.
“You ain’t getting paid, Birkenfeld. Keep dreamin’.”
“Yeah? Give me your cell number. When you’re out there blowing the sidewalks next winter, I’ll call you from my convertible Porsche in Saint-Tropez.”
Most of the negative chatter died down when a senior guard named Harold starting taking my side. He was a smart, friendly dude with no attitude, a guy who read the Wall Street Journal. At times the BOP guys supervised the meal service, and Harold started cruising by my table, grinning and jabbing a finger my way.
“There he is! It’s Mr. Thirty-Percent!”
“Told ya, boys.” I’d grin at my lunch mates. “Even Harold knows the score.”
“Holy shit,” they’d murmur. “Birkenfeld’s really gonna get paid.”
My original sentence had been slated for forty months, but had been reduced on account of good behavior to thirty-one months—two and a half years. The Department of Justice didn’t fight it. They knew they’d screwed me, and with the rash of media covering my story, the whole world knew it as well. Maybe they thought if they eased up, I’d be less inclined to go after them once I was free. They were wrong. I was just biding my time, making the best of prison life, and keeping faith with that old Mafia adage: “Revenge is a dish best served cold.”
No monumental events happened during my time at Schuylkill. Nobody got killed, fights were rare, and the guys generally behaved themselves because once inside Camp Cupcake, they could see the lights of freedom twinkling at the end of that long dark tunnel. Doug came to visit me often, and so did Rick James, my best buddy from the State Street days in Boston, as well as other close friends. My dad and stepmom visited when they could, writing frequently to show their support and bolster my spirits, as did my brother Dave from Seattle and my mom from Florida. I’d call when I could, assuring my family and close friends that all was well with me. I read just about everything in the prison library and thought a lot about my adventures in Switzerland. But I had no regrets, only residual fury at the Department of Justice. I learned a lot about the law and discovered that half the time it was mortally flawed. My fury would not be cured, but it never dimmed my grin.
I woke up one day in the summer of 2012, realizing that it was alm
ost over, getting close. Some of the guys in the block had served out their time and gone home, but my long-suffering buddies were still there. It was a strange feeling; nearing the end, anxious to taste my freedom again, yet laced with melancholy for those I’d be leaving behind. It was much like high school or a military experience; you didn’t make lifelong friends with everyone, but some would stick with you forever, at least in your heart and mind.
Anwar had brought me a burger that day. He worked in the kitchen and always slipped something inside his jacket for me or one of our buds. We sat in my cube as I enjoyed the treat and sipped a Coke.
“You’re leaving in a month,” Anwar said. “Bet you’re lookin’ forward to leaving.”
“Yeah, Anwar, I am. But it’s been a good time here. How much longer do you have, bro?”
“Aw, I got another fifty months.”
I nodded as I swigged my Coke, but I was thinking four fucking years.
“Bet you’ll be excited to go too, Anwar.”
“No.” He shook his head slowly and stared out the window. “I want to stay here.”
I leaned back in my chair and looked at him. “What are you saying, man?”
“Brad, you guys are always talking about those mobile phones and computers and the Internet. I don’t know what you’re talking about. We got nothin’ but typewriters here. Like okay, some guys got those illegal cell phones, so I’ve seen ’em. But when I was on the outside it was before any of that stuff. What am I gonna do out there? I got no skills, no family, no money. I got a warm bed here, a hot shower, and food.”
I nodded my understanding, but I was stunned, and the anger and pity welled up in my throat. He’d been totally institutionalized, with nowhere to go, no future. That’s what Schuylkill meant to Anwar, and to thousands of guys just like him; the best end of a long rough road paved with hard times and sorrow. I patted his shoulder, but I could barely look at him.
“You’ll be all right, Anwar. You should give it a shot.”
He just smiled at me. He knew better.
On August 1, 2012, which happened to be Swiss National Day, I turned in my prison uniform and donned a set of Champion sweats and sneakers. The guys gathered around my cube, and I gave away everything I had, except for my box of legal files. It wasn’t much; a cheap watch I’d bought at the commissary, all my writing materials, magazines, books. It was just a gesture, but all we could do for one another. Anwar, Bill, and Cliff walked me out into the sunlight and down that long corridor to the front entrance. They couldn’t go any farther. We shook hands and hugged, and I turned away for freedom.
Doug and Rick James had driven down to pick me up. In the back of the BMW X5 they’d laid out a mobile picnic for me: steak, pizza, fresh donuts, soft drinks, and coffee. We began the long drive to New Hampshire, where I’d have to report to a halfway house for a two-week stint, and we laughed and bantered and wallowed in the heady breeze of my liberation. It was the best road trip of my life, bar none.
In order for a prisoner to be released, he had to have proof of new residence and a job. For many of the guys inside, that would have been a challenge, but for me it was easy. I’d chosen New Hampshire for a reason; “Live Free or Die” meant no state income taxes. I knew by then that I was going to get paid, so that tactical choice was going to save me millions. The staff at Schuylkill never suspected my motives. They probably just thought I liked maple syrup.
I spent an easy two weeks at the halfway house in Manchester, New Hampshire, a simple brownstone housing twenty other “federal graduates.” Less than a week after I arrived there, Doug took a call in his Boston office from Dean Zerbe in Washington. The first words out of Dean’s mouth were “We’ve got white smoke!” Dean told Doug that the IRS was offering me a whistle-blower award of $104,000,000 for exposing UBS’s involvement in the largest tax fraud in US history. It sure looked like my award was about to happen, but since I’d learned the hard way to never trust the government, I just carried on.
Then I moved on to my new job. My dad had gone to a Quaker boarding school in Pennsylvania, and one of his old schoolmates, Fritz Bell, owned a small farm and conference center in Raymond, New Hampshire, about thirty miles away. Fritz was a sweet elderly gentleman and he’d said to my dad, “Of course we’ll take Brad, with pleasure!” Fritz and his family were delightful. They gave me my own digs in a little old caretaker’s house on the property, and I happily groomed the gardens, built rock walls, repaired the barn, and inhaled the crisp autumn air. I’ve always enjoyed physical labor; it keeps you grounded. I would even have declined the small salary, but the Feds wanted proof of my rehabilitation. Irony of ironies, they’d spent a small fortune in taxpayer money keeping me in prison, then demanded that some taxpayer employ me.
Early in September, Steve Kohn called me from Washington, saying that he was on the way up to see me. He was going to fly up to Boston, hop on a commuter flight to Manchester, rent a car, and drive down to Raymond.
“You’re going to be home, right, Brad?” He sounded very excited.
I laughed. “Don’t worry. I’m not allowed to leave the state.”
That evening we stood face-to-face in my tiny kitchen, me in my muddy work boots, torn jeans, and lumberjack shirt, and Steve wearing his lawyerly suit, though his tie knot was loose and his face flushed. He opened his brief case on my rickety table, and took out a US government check issued by the US Treasury Department (Exhibit 17).
It looked exactly like those refund checks you get sometime after April 15, if you’re lucky. It was made out to Bradley Birkenfeld, in the total amount of $75,816,958.40! My total reward was for $104 million, but the government had taken out taxes. Did I care at that point? Hell no. What’s a few dozen million between friends, right?
We didn’t say much, because we were both speechless with victory. We shook hands and hugged like a diminutive coach and his quarterback who’d just won the Super Bowl. I turned the check over, endorsed it, and then we walked it over to the conference center and made multiple color copies, for later framing. Steve hurried on back to Washington where, in the morning, he’d be depositing my good fortune in an escrow account. We knew if we tried to deposit it in a Manchester bank, they’d probably call the cops.
On September 11, 2012, Steve and Dean held a press conference at the National Press Club in Washington, DC, where they announced the largest reward in whistle-blower history had just been bestowed upon Bradley Birkenfeld, recently released from federal prison. Still being on probation and forbidden from leaving New Hampshire, I couldn’t be there in person. But Doug stood in for me and gave a speech in my stead, saying everything I had on my mind at the time. It was a powerful, damning oratory.
At the Department of Justice, I knew they were kicking the furniture and cursing. Kathryn Keneally, head of the DOJ Tax Division at the time, would later admit that when her BlackBerry flashed with the news, she threw it across the room and yelled, “A hundred and four million?! That’s more than my entire annual budget!”
A few days later, I asked Doug and Rick to visit a car dealership in Boston. On the lot was a black Porsche Cayenne Turbo, one of a kind on the whole East Coast. The price tag was north of a hundred grand. Doug and Rick called to ask me if I wanted to negotiate.
“Nah, just pay the sticker price. No sense in haggling over joy.”
The beauty was delivered to the farm on a flatbed truck, like an oversized wedding cake. The next day a nice lady leaving the conference center noticed the Porsche and asked Fritz Bell to whom it belonged. He smiled and said, “The gardener.”
At the end of November, my home confinement and work-release periods were over. I wrote a $5,000 check to each member of Fritz’s family, just by way of saying thanks. After all, they’d been so hospitable and nice, and had never mentioned my good fortune or expected a penny of it. Solid people with a sense of humanity.
Needing a new place to hang my hat, I’d been in touch with a real estate agent in Rye, a beautiful spot astride the Atla
ntic Ocean. She’d sent me some rental specs and photographs. This one house was a lovely seven-bedroom mansion with a small guest cottage, set out on lush lawns, surrounded by high trees, not far from the beach. But what caught my eye was its towering white flagpole. In my mind, I could already see the giant flag I’d buy for that pole, inky black with a skull and crossbones—the Jolly Roger.
“I’ll take it,” I said to the agent.
“It’s pretty expensive, Brad,” she warned. “About seven thousand dollars a month.”
I grinned and laughed softly through the phone.
“My dear,” I said. “No worries. UBS is footing the bill.”
3Senator Chuck Grassley is the author of the 2006 whistle-blowing law and is a staunch advocate for whistle-blower rights. He has supported whistle-blowers and passed legislation in furthering the protections and awards to courageous whistle-blowers for decades during his tenure in the US Senate. He is also a supporter of Birkenfeld’s case (Document 6).
CHAPTER 15
RICH MAN, POOR MAN
“How wonderful it is that nobody wait a single
moment before starting to improve the world.”
—ANNE FRANK, HOLOCAUST VICTIM
AS THE LAST LEAVES of autumn left the trees in New Hampshire, I stood on a hard rocky beach, watching a single defiant sailboat brave the curling crests of the coming winter. There in the distance the boat’s white canvas triangle whipped and flapped in the wind, its pilot unafraid of the ocean’s vast power. I felt a kinship with that man, and had he known me, I know he would have felt the same.
The air was fresh, briny, and pure, though I could still smell Schuylkill in the linings of my lungs. Yet there I stood, head still high, my hands in the pockets of a simple peacoat, an ex-convict with an awful lot of money. Rags to riches, pauper to prince. The millions in my bank account were nearly unfathomable, much more than I ever could have made as a Swiss private banker. It might have humbled me, if I hadn’t felt it was a just reward.
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