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by Ian Allison
August 25, 2016
from
IBTimes Website
Lucifer's
Banker by Bradley Birkenfeld
covers Birkenfeld's
time at UBS bank.
Reuters
Birkenfeld's book about the
UBS Swiss banking
investigation,
Lucifer's Banker,
is published in October.
UBS, the world's largest wealth manager, is facing embarrassment
over fresh revelations going back to the tax investigation that led
to the collapse of Swiss banking secrecy.
Two significant events are
looming before UBS.
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The first is the possibility of a public trial
in France, featuring UBS whistleblower Bradley Birkenfeld,
concerning historic tax evasion allegedly orchestrated by the bank.
That could happen this year.
-
The other is the publication this October of Birkenfeld's scathing
new book,
Lucifer's Banker, which covers his
time at UBS.
The tax evasion controversy, which was first highlighted in 2005,
subsequently involved the US Department of Justice, the State
Department and Internal Revenue Service.
It was prompted by
disclosures made by Birkenfeld that UBS had helped wealthy US
citizens evade taxes using offshore financial vehicles and
Swiss-numbered accounts.
In 2009, UBS paid $780m (£588m, €693m) to US authorities to avoid
prosecution.
Birkenfeld served 31 months in prison for one count of conspiracy to
abet tax evasion by one of his clients. After he was released he was
paid a record $104m by the IRS for helping recover unpaid taxes.
However, Birkenfeld has since said that he was systematically
prevented from giving testimony in open court - but this may be
about to change thanks to the French authorities.
Bradley Birkenfeld
Handout
In February 2015, under the request of a French federal subpoena,
Birkenfeld was allowed to travel to Paris where he spent 10 hours
with magistrates giving sworn testimony and submitting multiple UBS
documents in his possession.
"Why is it that I had to travel 3,000 miles across the pond to go
help a foreign government?" asks Birkenfeld.
"My own government
covered it up. Well now the French case is coming forward - and
unlike the US they are actually holding a trial. And not only
France; Germany has also contacted me to help them against UBS, as
well as various other foreign governments. I have not heard from the
UK, surprisingly," he said.
IBTimes UK asked
HMRC if it had considered contacting Birkenfeld.
It
issued this statement:
"HMRC doesn't discuss identifiable
individuals. We are getting tougher on offshore tax evasion,
securing more than £2.5bn since 2010.
"We welcome any information on potential tax fraud, and receive data
from a wide range of sources, gathering hundreds of millions of
items last year alone.
We then analyze the data using some of the
world's most sophisticated systems to identify tax dodgers."
Birkenfeld points out that there is €1.1bn in escrow as bail to
cover a potential penalty for UBS in the French case.
He adds:
"UBS
offered €200m but said they won't plead guilty and the French
refused to accept such a pathetic offer, so UBS pulled the €200m off
the table and then the French kicked it up to €1.1bn.
"The French have a moral standard and they firmly stand up on issues
that are important to them. There is a moral DNA within the society
of the French people."
UBS declined to comment on either a possible trial in France or the
release of Birkenfeld's book.
'James Bond'
bankers
The standard defence among UBS top brass in wealth management was
that they didn't know what their large teams of bankers were getting
up to.
It certainly was a secretive business, which made use of
untraceable SIM cards and encrypted laptops.
Private bankers would
be sent to the US on a quarterly basis to court high net-worth
clients at events such as Art Basel in Miami and other soirees, most
of them sponsored by UBS.
"We would work with US UBS offices to see what VIP events they can
get you into, and who they could actually refer from the bank.
That
was covered by something we called the 'referral program' and
involved a complex and sophisticated system of remuneration for both
sides," said Birkenfeld.
"If you sent a client to me and they put bankable assets you would
get 50% of the revenue generated. So they incentivized you and
that's against the law because you are aiding and abetting clients
to evade their tax obligations."
Politically exposed
persons
Birkenfeld claims the UBS cover-up stretches to the highest levels
of the US establishment, where an additional layer of secrecy
covered the accounts of bank's politically exposed persons (PEPs).
He promises four big names will be exposed in his book.
He said:
"A lot of PEPs were kept under secret, secret status. Swiss
banking was secret, but then PEPs were even more secret. This was
just too sensitive.
They had a desk in Zurich dedicated to PEPs out
of Washington, DC.
"It could be politicians, or it could be someone who was very close
to political circles or doing some dodgy work maybe in Nigeria or
somewhere else in the world.
UBS and Obama
Birkenfeld claims there was a glaring conflict of interest involving
then Senator
Barack Obama, which essentially placed him on the UBS
payroll.
He said UBS was an enthusiastic fundraiser for Obama for
his 2008 election campaign and senior executives at the bank bundled
campaign contributions. Bundlers are expected to raise in excess of
$500,000 each for the US president's re-election effort.
UBS also
advised the president on investments and strategy for the country. Birkenfeld states that when he gave testimony about UBS to the
Senate Committee in late 2007, Senator Obama was conspicuously
absent.
Birkenfeld said:
"When I went to give this information to the US
Senate Committee they provided me a subpoena to testify, as the DOJ
refused to do this. At this time Senator Obama was an active member
of that committee and he never showed up for any of those hearings.
Not one.
"But at the same time he was taking millions of dollars from UBS in
campaign contributions. That's the ultimate conflict of interest
because he should have been there helping to investigate UBS on
behalf of the American taxpayers, but instead he was taking money
from UBS.
I call it political prostitution. He is taking millions of
dollars from a criminally corrupt bank in direct violation to his
oath of office."
"Why wasn't I allowed to testify in public? They stopped it. Why
wasn't I allowed to testify at Raoul Weil's trial? They stopped it.
I had to fight to go find the French magistrate to help them.
"We are dealing here with the corruption of US government and people
like Barack Obama and the corruption of big banks like UBS.
These
are people that have really betrayed their country."
Bradley Birkenfeld's book
Lucifer's Banker - The Untold Story of How
I Destroyed Swiss Bank Secrecy is published by Greenleaf on 18
October 2016.
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