Chapter 8 Part 1: The Mexico Setup - A Dangerous Game

The Department of Justice did not want Bradley Birkenfeld. He showed up anyway.

The DOJ’s Nightmare

Kevin Downing, a senior prosecutor in the DOJ Tax Division, had a problem. Two lawyers were calling on behalf of an anonymous Swiss banker who claimed to have the goods on the biggest tax fraud case in US history. Names of rich Americans hiding money in Swiss accounts. Names of Swiss banking officials who ran the whole scheme. Names of American politicians who knew about it.

Sounds like a career-making gift, right? Not if those names include people who sign your paycheck.

An election was coming. Obama had already picked Eric Holder as his attorney general candidate. Holder was a partner at Covington & Burling. And one of Holder’s biggest clients? UBS.

Downing was also still licking his wounds from the KPMG disaster. A judge had just torched the entire prosecution team for violating defendants’ constitutional rights. The next case had to be a home run. Or else.

So Downing denied Birkenfeld immunity. Denied a subpoena. Hoped the anonymous banker would just go away. But Birkenfeld did not go away. He was a pit bull.

Walking Into the Temple

June 2007. Birkenfeld packed his bags in Geneva, along with a briefcase full of files, backup CDs, and what he called his “NOC list” after the Mission Impossible movies. The names of illicit depositors. His aces in the hole.

He told nobody where he was going. Bought a cash ticket to Boston to throw off anyone watching, then headed to Washington.

The DOJ building on Pennsylvania Avenue looks like a temple to angry gods. Inside the Great Hall, Birkenfeld spotted the famous “Spirit of Justice” statue. One breast exposed in the original design, except the department had spent $8,000 on drapes to cover it up. He should have known right then this was no place for a Birkenfeld.

The Worst Welcome Ever

They walked into the Tax Division conference room. Kevin Downing sat at the head of the table, flanked by Karen Kelly and IRS investigator Matthew Kutz. Before Birkenfeld could even say hello, Kelly jabbed a finger at him and snapped:

“You’re no whistleblower! You’re nothing but a tipster!”

That set the tone. Over the next two hours, Birkenfeld laid out his entire career. How UBS trained bankers to dodge federal agents. How they solicited American clients. His dozens of cross-border trips. All they offered in return was lukewarm water.

When Birkenfeld asked about immunity, Downing said asking for immunity was “indicative of guilt.” Birkenfeld explained he needed protection from the Swiss, not the Americans. He was already breaking every Swiss law on the books just by sitting there.

Kelly kept hammering: “The only reason you’re here is a whistleblower award.”

Birkenfeld stood up. “I started this process a year and a half ago, long before any reward existed. The only thing I could have gotten was prison time in Switzerland.”

Round Two

The second meeting was no better. Birkenfeld walked them through stacks of UBS documents page by page. Account opening procedures. Numbered account structures. He even sketched layouts of underground vaults where clients hid jewels, cash, bearer bonds, artwork, and gold bars.

Downing responded with irrelevant questions about Birkenfeld’s salary and lifestyle. Kelly repeated her mantra: “You’re only here for a payoff.”

“That’s right,” Birkenfeld said. “I’m hoping for the Nobel Peace Prize.”

Only Matt Kutz, the IRS guy, seemed interested in actually following the money.

Finally Birkenfeld played one card. He gave them a name: Abdul Aziz Abbas. An Iraqi national living in New York. So important that his boss Christian Bovay had a separate private phone line in his office just for this client. Like the red phone between the Kremlin and the White House.

The room went silent. Birkenfeld had their attention. But whether the DOJ would do anything useful with it was a different question entirely.

Previous: Chapter 7 Part 2 - Tarantula Next up: Chapter 8 Part 2 - The Mexico Setup Continues

Part of the Lucifer’s Banker Uncensored series