Chapter 14 Part 2: Camp Cupcake - Freedom and the $104 Million Surprise

Birkenfeld turned prison into a comedy show. This is the second half of Chapter 14 in my Lucifer’s Banker Uncensored retelling series.

The Janitor Who Knew Everything

Birkenfeld’s prison job was cleaning floors. He cleaned the warden’s office too – and the warden was rarely there. So Birkenfeld emptied the trash, took it back to the janitor closet, and read every discarded email and memo. His block mates wondered how he always knew what was coming next week. “Instincts, boys!” he told them.

He also made it his mission to welcome new inmates. As terrified newcomers arrived with crying families, the guards tried to make them feel small. Birkenfeld greeted them with a grin: “Welcome to Camp Cupcake, brother! This place is easy breezy!” The guards told him to shut up. He dared them to add three more years for being friendly.

Media Shield

The staff could not really touch him. 60 Minutes had aired his story before prison. Every few weeks, crews from CNBC, Swiss TV, or reporters from the Financial Times showed up for interviews. The guards were terrified he would trash the prison on camera. So it became “hands off Birkenfeld.”

Meanwhile, his lawyers Steve Kohn and Dean Zerbe kept firing letters at every government body Birkenfeld had helped. Senator Kerry’s office called to check on his welfare. The prison counselor nervously asked if everything was okay. Birkenfeld loved every second of it.

The $100 Million Conversation

About two years in, Kohn and Zerbe visited with real news. They had filed a 200-page whistleblower brief with the IRS, packed with sworn statements from senators, regulators, and IRS agents. The math was simple: UBS paid $780 million in fines. Subtract the SEC’s cut, and about $580 million was left. The whistleblower law allowed 15-30% of that.

“We’re thinking it’ll be closer to $100 million,” Steve said.

Birkenfeld gripped both their shoulders. “You guys can come visit me down here any day!”

The prison guards scoffed: “You ain’t getting paid, Birkenfeld.” He shot back: “Give me your cell number. When you’re out blowing sidewalks next winter, I’ll call you from my Porsche in Saint-Tropez.” A senior guard named Harold started calling him “Mr. Thirty Percent” at meals. The other inmates finally believed it.

Anwar’s Goodbye

His sentence got reduced from forty months to thirty-one for good behavior. As release day approached, his friend Anwar – who had fifty months left – sat with him and said something that stopped Birkenfeld cold.

“I want to stay here.” Anwar had gone in before smartphones and the internet existed. He had no skills, no family, no money. Prison gave him a warm bed, a hot shower, and food. Birkenfeld patted his shoulder but could barely look at him.

Freedom, Then the Check

On August 1, 2012 – Swiss National Day – Birkenfeld turned in his prison uniform. He gave away everything he had. His friends Anwar, Bill, and Cliff walked him to the gate. Handshakes, hugs, then he was out.

He chose New Hampshire for his halfway house. Not for the scenery. “Live Free or Die” meant no state income tax. He knew a payout was coming and that choice alone would save him millions.

Less than a week after arriving at the halfway house, the call came. Dean Zerbe’s first words to Birkenfeld’s brother Doug: “We’ve got white smoke!” The IRS was awarding Bradley Birkenfeld $104 million – the largest whistleblower award in US history.

Steve Kohn flew to New Hampshire and hand-delivered a US Treasury check for $75,816,958.40. The total was $104 million, but the government had already taken out taxes. Birkenfeld endorsed it in his tiny kitchen, wearing muddy boots and a lumberjack shirt.

At the DOJ, the head of the Tax Division saw the news on her BlackBerry, threw it across the room, and yelled: “A hundred and four million?! That’s more than my entire annual budget!”

The Gardener’s Porsche

Days later, Birkenfeld sent his brother to a Boston dealership for a black Porsche Cayenne Turbo. Price tag: north of $100,000. “Just pay the sticker price,” he said. “No sense in haggling over joy.”

It arrived at the farm where he was doing his work release – gardening, building rock walls, repairing barns. A visitor spotted the Porsche and asked the farm owner who it belonged to. He smiled and said, “The gardener.”

When his probation ended, Birkenfeld rented a seven-bedroom mansion near the Atlantic Ocean. What caught his eye was the tall white flagpole. He already knew what flag he would fly: a Jolly Roger. Skull and crossbones.

“It’s pretty expensive,” the agent warned. “Seven thousand a month.”

“No worries,” Birkenfeld said. “UBS is footing the bill.”

Previous: Chapter 14 Part 1 - Camp Cupcake Next up: Chapter 15 - Rich Man, Poor Man

Part of the Lucifer’s Banker Uncensored series