Chapter 4 Part 2: Sports Cars and Yachts - When Excess Meets Secrecy

The second half of this chapter reads like a spy movie crossed with a luxury travel brochure. UBS trains its bankers to evade customs agents. Birkenfeld builds his own client pipeline. And the money just keeps rolling in.

Spy School at UBS

A guy named Hans runs a security briefing for the bankers. Think bald German stereotype barking orders. Never store client names on your phone. Only use encrypted laptops. If customs asks why you are in the US, always say “pleasure.” Never admit to business.

Birkenfeld listens but quietly decides to ignore most of it. He is the only banker with a US passport. Following the same playbook as everyone else would actually make him easier to catch. So he comes up with his own approach. Smart move, honestly.

The Art of Schmoozing Rich People

UBS had a whole system for getting close to wealthy targets. They sponsored art festivals, tennis matches, yacht regattas, Formula One races. All of it looked like charity and culture on the surface. Underneath, it was a net new money machine.

One big project was the Verbier music festival. UBS funded a young orchestra and booked them across the US and beyond. Birkenfeld grabbed tickets for the Carnegie Hall gala, checked into the Plaza, rented a tux, and invited three prospects: a plastic surgeon, a dentist, and a real estate guy who looked like Tony Soprano.

After the concert, they all went to the Russian Tea Room for caviar and cognac. Birkenfeld talked about everything except money. Until the surgeon finally cracked and asked what Birkenfeld could do for them.

His answer: “Zero. Actually, three zeros. Zero income tax, zero capital gains tax, zero inheritance tax.”

Then he walked them through a scheme. Put $5 million in a declared account. Slip $1 million into a secret numbered account. Take a loan from the declared account into the numbered one. Invest it. Pay back the loan with the profits. No tax consequences on loans from yourself. The leftover money in the secret account? Use it in Europe. Buy a yacht. Park it in Cannes. If the feds come looking, all they see is clean paperwork on the declared side.

The Geneva Magic Carpet Ride

Once a client was hooked, Birkenfeld had a whole routine. Black Mercedes at the airport. Suite at Le Richemond with flowers and Swiss chocolates. Five-star dinner. Then a nightclub called Velvet where beautiful women happened to be very friendly. By midnight the client is having the time of his life.

Next morning, Birkenfeld picks him up in a Ferrari. They drive to UBS headquarters at 16 Rue de la Corraterie. Marble floors, tall pillars, security cameras. A private room with croissants and espresso. A woman runs $200,000 in cash through a bill counter. Forms get signed. Then they take an elevator two stories underground into a vault that looks like Fort Knox. Safe deposit boxes big enough for a Monet. The client stashes whatever he brought, hands over the keys, and flies home.

That $200K was just the good-faith deposit. A month later, $3 million would hit the numbered account.

The Numbers Behind the Curtain

By the end of his first year, Birkenfeld’s biggest client Igor Olenicoff had moved nearly $200 million into numbered accounts. Combined with all his other clients, Birkenfeld was managing about $400 million.

His cut was 18 percent of fees generated on that money. Not 18 percent of the money itself. UBS charged Olenicoff 3 percent to manage $200 million. That is $6 million. Birkenfeld’s share: $1,080,000. Plus cuts on every trade, loan, and currency transaction.

He spent it accordingly. A $25,000 Audemars Piguet watch. Cuban cigars from Davidoff. Italian Brioni suits. A luxury flat in Geneva with 15-foot ceilings and satin sheets. A Ferrari Maranello. And the crown jewel: a Swiss chalet in Zermatt with a picture window framing the Matterhorn.

Looking back, Birkenfeld says this was the peak. Making insane money. Living a nonstop party. Clients who shrugged off bad investments and just threw more cash his way. He slept well at night.

But we already know from the prologue where this road ends. The chalet and the Ferrari and the cognac were all borrowed time.

Book: Lucifer’s Banker Uncensored by Bradley C. Birkenfeld | ISBN: 978-1-63576-836-4

Previous: Chapter 4 Part 1 - Sports Cars and Yachts Next up: Chapter 5 Part 1 - Burned in Bern

Part of the Lucifer’s Banker Uncensored series