Chapter 11 Part 1: The Twilight Zone - Nothing Makes Sense Anymore
Birkenfeld is now a free man with an ankle monitor and no passport. The guy who handed the US government the biggest tax fraud case in history is being treated like a flight risk. Welcome to the twilight zone.
Dragged to Florida
Prosecutor Kevin Downing picks Fort Lauderdale for the arraignment. Not Boston, where Birkenfeld lives. Not DC, where the DOJ works. Florida. As far away as possible while still on the East Coast. Classic forum shopping – pick the court that benefits you, not the one that makes sense.
A month earlier, Birkenfeld had been arrested at Boston airport (he knew it was coming after his colleague Liechti got detained). Spent a night in a New England jail reading a book about a POW in Vietnam. Perspective check.
The Boston Judge Who Wasn’t Having It
The next morning, a Boston judge takes one look at the DOJ’s request to hold Birkenfeld indefinitely and basically laughs them out of the room. No prior arrests. Passport already confiscated. The DOJ wanted him locked up to sweat him out – the judge said “nonsense” and released him on his own recognizance.
What the DOJ never told the judge: Birkenfeld had come to the US voluntarily to give more testimony. Downing actually pressured Birkenfeld’s own lawyer not to reveal that fact. They presented him as a dangerous criminal. The judge saw through it anyway.
The Face-Off at DOJ Headquarters
Days later, Birkenfeld walks into Downing’s conference room in Washington. Downing demands “all the names.” Birkenfeld shrugs – the Senate and IRS already have everything. He slides over a copy of the same list he gave Congress, then pulls out a Monopoly “Get Out of Jail Free” card from his wallet and pushes it across the table.
“So, will this work now?”
Downing, stunned, then explodes when Birkenfeld mentions his upcoming SEC and Senate meetings. He screams: “You will NOT meet with, or talk to, anyone from the Senate or the SEC!”
That threat may have been two federal felonies. Obstructing a witness before Congress and intimidating someone from cooperating with a federal agency. Junior prosecutor Jeff Neiman just sat there watching. Nobody said a word.
Guilty Plea in Fort Lauderdale
June 19, 2008. Birkenfeld stands before Magistrate Seltzer and pleads guilty. Not because he thinks he’ll win at trial – he knows the evidence is all stuff he personally handed over. Fighting it would just fuel Downing’s fire. Better to plead guilty now and argue for leniency at sentencing later.
The charge sheet was six pages of details. Every single fact came from Birkenfeld’s own testimony. The DOJ just copy-pasted his whistleblower evidence and repackaged it as their own detective work. The clear message: “We caught this guy.” The truth: he walked in and gave them everything.
Seltzer sets bail at $100,000 and slaps on an ankle monitor. Birkenfeld flies home to Boston wearing it under his shorts like “an oversized G-Shock watch.”
Meanwhile, the Fireworks
While Birkenfeld broods in his brother’s condo, the story explodes. The Financial Times runs pieces about UBS banning employee travel to the US. The New York Times digs in. The DOJ files a “John Doe” summons demanding UBS reveal 19,000 American account holders – every material fact in that summons came from Birkenfeld. They just took credit for it.
Senator Carl Levin’s committee gears up for historic public hearings on Swiss tax havens. They finally have the ammunition they needed. All of it delivered by the guy sitting in Boston with a tracker on his ankle.
Then the phone rings. Bob Roach from the Senate committee wants Birkenfeld back in Washington to help with the investigation. “Always happy to help,” he says.
Previous: Chapter 10 - Hunted Next up: Chapter 11 Part 2 - The Twilight Zone Continues
Part of the Lucifer’s Banker Uncensored series