Chapter 4 Part 1: Sports Cars and Yachts - The Lavish Life of Swiss Bankers

Chapter 4 opens with Birkenfeld cruising Geneva in a candy-apple red Ferrari 365 GT Spyder. A $250,000 car. Not his money though. This was “OPM” – Other People’s Money. His overseas clients would tell him what car they wanted, he would buy it, slap on Finnish tax-free plates, and stash it in a luxury garage. When they visited, he handed them the keys. The rest of the time? He drove it himself. Nice perk.

September 11 Hits Different When You Are Abroad

It is early September 2001. Birkenfeld has just left Barclays and is on “gardening leave” – a European thing where your old employer pays you full salary for months so you do not trash-talk them on the way out. He is enjoying life, waiting for his October start date at UBS.

Then his buddy John Ross calls. A plane just hit the World Trade Center. Birkenfeld blows him off. Impossible, wrong flight pattern, probably some idiot in a Cessna. The phone rings again. A second plane hit the other tower.

That changed everything. He parked the Ferrari, went home, and sat up half the night watching the towers fall on repeat while drinking scotch and calling everyone he knew back in the States. As an American abroad, he felt completely alone. No sports bars to scream at the TV with strangers. Just him and a television in Geneva while his country burned.

He even had drinks with Osama bin Laden’s sister Nadia at a Geneva bar shortly after. She told him Americans “shouldn’t be surprised.” He pushed back hard. They did not go dancing after that.

First Day at UBS

On October 2, Birkenfeld walked into 16 Rue de la Corraterie – a four-hundred-year-old brownstone with zero markings that it was a bank. No sign, no logo. The building itself whispered: we keep secrets here.

Inside was another world. Thirty private bankers at the “North American desk,” dressed like magazine models. Rolling bars stocked with liquor. Cigar smoke curling through conversations about VIP clients. Multi-layered passwords on every computer. Birkenfeld compared it to a Cold War CIA spy cell.

On day one, he got his client list. One name jumped out: Abdullah bin Laden, Osama’s half-brother, sitting on $14 million in a secret account. The Bush administration had already whisked the bin Laden family out of the US on a private jet right after 9/11 while all commercial flights were grounded.

The $89 Million Surprise

In November, UBS flew their bankers to an off-site at Wolfsburg Castle – a 400-year-old fortress the bank literally owned. Mid-dinner, a messenger whispered to Birkenfeld’s boss Christian Bovay. His client Igor Olenicoff had just wired his first chunk of money: $89 million from the Bahamas.

Birkenfeld played it cool. “Don’t worry. The rest of the two hundred mil will come along shortly.” Word spread through the dinner like wildfire. From that moment on, he was a rock star at UBS.

How UBS Squeezed Clients Twice

The real eye-opener came during training. Bovay explained the scam with a hypothetical Texas rancher hiding $10 million. First, UBS charges 3% per year just to hold the money. Then they convince the client to lock it in a time deposit at 5% return. Sounds great, right?

Here is the trick. When the client inevitably needs his money before the deposit matures, UBS loans him his own money back – keeping $1 million as collateral and charging interest on the loan. So UBS collects fees for holding the cash, then collects more fees for lending the client his own cash. And the client is happy because it is all tax-free.

It worked over and over again.

Spy School for Bankers

The training got even wilder. A compliance officer named Hans – thick Swiss-German accent, black suit, white socks – coached the thirty bankers heading to America on how to handle US customs agents. Birkenfeld sat there thinking it felt like a World War II movie where they were Nazi agents being prepped for deployment to New York.

UBS knew exactly what American tax law said. They had hundreds of domestic branches across the US, full of lawyers and accountants. They were not clueless. They were deliberately playing both sides.

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Part of the Lucifer’s Banker Uncensored series