On October 17, 2008, during the throes of the global financial crisis, officials from the U.S. Department of Justice summoned Swiss banking regulators and executives from UBS, Switzerland’s largest bank, to a closed-door meeting in New York to discuss the bank’s role in helping American clients evade taxes. It was a sensitive moment: the Swiss government had bailed out UBS the previous day. The bank’s game plan was simple, a company insider later told Reuters: “Admit guilt, settle the case quickly, and move on.”
But the Swiss were in for a nasty surprise. Four months earlier, U.S. authorities had imprisoned Bradley Birkenfeld, a former UBS wealth manager who had begun to spill the institution’s secrets. Cooperating with U.S. investigators, Birkenfeld described a culture of deception at the bank, which circumvented many countries’ laws and the bank’s own regulations, making use of encrypted computers and offshore shell companies and trusts. (Birkenfeld also claimed to have relied on less sophisticated methods, such as hiding diamonds in a toothpaste tube to smuggle them across borders.) Birkenfeld claimed that UBS, seeking to make inroads with “high net worth individuals”—Silicon Valley entrepreneurs, Russian oligarchs, Saudi princes, Chinese industrial magnates—sponsored events popular with global economic elites, such as the America’s Cup yacht race and the Art Basel festival in Miami. In his confessional book, Lucifer’s Banker, he describes organizing what he touts as the largest-ever exhibit of Rodin sculptures. “I can’t even remember how many of those art lovers ended up in our vaults,” Birkenfeld writes.
According to Birkenfeld, other UBS bankers also used such events to introduce themselves to ultrarich attendees and pitch their bank as a safe harbor where vast quantities of wealth could reside, out of the reach of pesky tax collectors. The Department of Justice estimated that in 2004 alone, Swiss bankers visited the United States 3,800 times to find and retain clients. The investigation found that UBS had helped
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