The CBS news magazine 60 Minutes featured a story about UBS whistleblower Bradley Birkenfeld this Sunday. In the story, Birkenfeld says he is the first Swiss banker ever to speak publicly about the famously secretive industry. He provided inside information that helped uncover thousands of untaxed Swiss accounts at his former employer, UBS. The accounts were owned by Americans and, so far, not one of their owners has gone to jail. But Birkenfeld is scheduled to enter a federal prison on January 8 for a 40-month term that he thinks he doesn’t deserve. The interview was broadcast Sunday, Jan. 3, at 7 p.m. ET/PT. Video of the story is now available from CBS.
"I gave them the biggest tax fraud case in the world. I exposed 19,000 international criminals. And I’m going to jail for that?" asks Birkenfeld. When reminded by Kroft that he was an enabler for clients who broke the law, he responds, "And I am the only one going to prison. Out of 19,000 accounts and no Swiss bankers."
According to Thomas Perrelli, the associate attorney general of the United States, Birkenfeld’s information helped his office get "the accounts that are the core of the fraud." The information led to UBS making a settlement with the U.S. government that included a fine of $780 million. But because Birkenfeld was not initially forthcoming about his largest American client, he was prosecuted. "If he had come forward and told us everything that he knew…in the summer of 2007, we think it’s likely he wouldn’t have been prosecuted," says Perrelli.
Six Americans who had off-shore accounts at UBS have pled guilty but not gotten prison time. Raoul Weil, the UBS official once in charge of its Wealth Management operations, has been indicted but is a fugitive from justice in Switzerland. Martin Liechti, a Swiss citizen who was UBS’ top private banker, was detained in Miami for four months on a material witness warrant, but allowed to leave the country in August. He was never charged in the U.S.
In his interview with Kroft, Birkenfeld also reveals little-known aspects of being a Swiss banker, including what kinds of services he provided clients, such as acting as a personal shopper "on a concierge level." Buying valuables is one way of hiding and moving assets, but Birkenfeld says it was just servicing clients the Swiss banking way. "People would ask you to make purchases for them, possibly maybe a car or a chalet – possibly — a nice watch. So you would also cater to the client in that regard and then deliver it to them upon their choosing,” he tells Kroft. "It could be in their hotel room. It could be in…another country."
In one case, he purchased diamonds for a U.S. client and brought them into the country concealed in a toothpaste tube. Birkenfeld says the stones were not worth more than $10,000 and did not need to be declared, so no laws were broken. Then Kroft asks, "If it was legal why did you put them in a toothpaste tube? I’m having trouble with that." Birkenfeld replies, "Oh, it was just a way of carrying them so I wouldn’t lose them."