Brad Birkenfeld, who famously exposed UBS tactics that were helping high-net-worth-individuals in the US with tax evasion, has questioned UBS’s assertion that it had nothing to hide following raids on its offices this week by 130 prosecutors and investigators.
As reported, the move came as part of an ongoing probe into the tax affairs of UBS clients by German authorities and resulted in the Swiss Bank being hit with a US$780m fine it agreed with the Department of Justice. The latest search involved some 2,000 clients whose details were on a database bought by prosecutors in the German state of North Rhine-Westphalia.
It’s not the first time that German tax authorities have bought discs with details of UBS clients, and in 2014 UBS paid €300m (£262m) to settle claims by authorities in Bochum, the same jurisdiction that has carried out this week’s raids, that the bank had helped German clients to avoid paying tax.
When International Investment put the assertion by a UBS spokesperson that that the bank had done nothing wrong, Birkenfeld, pictured left, said, after a long chuckle, “My response to that is very simple — I assume that your corporation was raided by 130 prosecutors this week because you are so above board and there’s nothing to worry about.
“Why are they sending in 130 guys — to see what cheese they are having on their sandwiches? Why would they be going in?
Birkenfeld refers to the case of a Swiss man known only as Daniel M, who was arrested by German authorities in May.
The BBC reported on the case at the time, saying that the case focused attention in Switzerland on the activities of the Swiss intelligence services, the banks and the “often awkward relationship between Switzerland and Germany”.
Before being imprisoned in southwest Germany, Daniel M had been a police officer in Zurich, then a security specialist for Swiss banking giant UBS and finally, it is alleged, a spy for the Swiss Federal Intelligence Service (FIS).
‘The gnomes of Zurich’
The case was indicative of a trail that some, including Birkenfeld, say show collusion between Swiss banks and Swiss tax authorities to protect the competitive advantage that Swiss banks had notoriously enjoyed in the days of banking secrecy.
It was this secrecy that led UK prime minister Harold Wilson to label Swiss bankers as “the gnomes of Zurich”, gnomes being known in fable for their love of gold and for working in dim light and living mainly underground, calling to mind Swiss bank crypts.
“During the years of Daniel M’s multifaceted career”, reported the BBC, “Germany watched with growing irritation as its citizens squirreled their savings away in Swiss banks, in effect – thanks to Switzerland’s famed banking secrecy laws – hiding their money from the German tax authorities.”
Birkenfeld says that these latest raids are part of the same ongoing investigations, investigations that he himself has aided in the past, he claims, by giving information to the authorities in Bochum who are behind the raids.
‘Same old story’
Bochum is a city in the state of North Rhine-Westphalia, which has already spent millions of euros on at least 11 CDs containing information on German citizens with Swiss bank accounts.
When International Investment tells Birkenfeld, who is talking to me from his home in Malta, that we spoke to a UBS representative in Switzerland who assured us that there was no question of any UBS employees having done anything illegal, a throaty chuckle comes down the line.
“The problem with UBS,” he says in a drawl that still betrays his Bostonian roots, “is that it’s like an alcoholic who can’t accept that he has a drinking problem…”
He concludes by saying of UBS’s claims that they have done nothing wrong “It’s a case of, the lady doth protest too much — are they pissed because they were doing bad stuff? Or are they really just pissed because they’ve been caught again?”
To view an archive of links to international articles about UBS cases, lawsuits and fines, visit https://lucifersbanker.com/ubs-articles/
To order a copy of the bestselling ‘Lucifer’s Banker — The Untold Story of How I Destroyed Swiss Bank Secrecy’ visit www.lucifersbanker.com
Click here to watch an exclusive video interview that International Investment conducted with Birkenfeld last year.