Brad Birkenfeld: Lucifer's Banker

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Just how bad is the ongoing fraud in the banking system? Get ready for a mind-bowing expose by a former insider at UBS.

Brad Birkenfield, author of Lucifer's Banker: The Untold Story of How I Destroyed Swiss Bank Secrecy, recounts the efforts he uncovered by his employer to help its clients cheat the US government out of tens of $billions in taxes.

But despite his working with the government closely to expose the gigantic conspiracy between US-based tax cheats and the giant Swiss bank, UBS, the so-called Justice Department went after Mr. Birkenfeld for abetting tax evasion by one of his clients. After spending thirty months in Federal prison, he was released and three weeks later, received a whistle-blower check for $104 million, the largest such check ever from the IRS Whistle-blower Office.

Once again, 300,000,000 Americans-plus got screwed by the corrupt Department of Justice. They’re not about justice, they’re about protecting themselves, trying to take credit, and making everyone else listen to what they say the story is.

We remember the financial crisis of 2008. It was devastating and so many people lost their jobs, lost their homes and so forth. In the entire financial crisis, there was not one banker to go to jail. The only banker to go to jail was the UBS whistleblower who exposed the largest and longest running tax fraud in the world.

Here’s the problem with the system. When you fine UBS you must realize UBS is a Swiss bank, so that means they write off the fine on their taxes. So then, that means the Swiss taxpayers carry the burden. That’s the first thing.

The second thing is go look at the millions and millions of dollars in legal fees spent to defend their conduct. The UBS shareholders pick up that tab. 

So you have UBS shareholders and Swiss citizens picking up the tab for bankers who just keep doing their business, and walk away untouched. How is this possible?

And third, the US government has set an incredibly bad precedent and zero deterrence. Because what they’re saying is, “Oh, if you get caught again, you just write a check. Yes, you might have to add $5 million or $10 million to that check, but just keep doing the business you’re doing.”

And the pathetic prosecutors at the Department of Justice say, “Oh, see? We’ve got a check and we can put it on our resume saying, ‘We got $200 million from this bank for doing illegal conduct.’”

Yeah, but you screwed the American people. It’s outrageous.

Click the play button below to listen to Chris' interview with Brad Birkenfeld (45m:31s).

This is a companion discussion topic for the original entry at https://peakprosperity.com/brad-birkenfeld-lucifers-banker/

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…I am only now (2 pm Sunday) getting to the point where I can do a little weekend recreation. I’ll have to come back to this tomorrow and let it make me angry on a weekday.
Thanks for bringing the 411!!
VIVA – Sager

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Call me grumpy because all of my Easter eggs are now finished, but I'm not buying into the 'good guy' message here. Whistleblower suddenly unearths his moral compass when he feels threatened by his employer? Nnnnah. Then he cashes in on a $104m payday to tell all. I almost felt like washing myself clean after reading this 'expose', which - let's face it - is not really anything we didn't already know.
The feelgood factor in a story usually emerges once the good guy comes clean, shows genuine contrition for being complicit in a global sham, and does everything he/she can to disable the whole sorry corrupt structure. I didn't get the remotest sense of any of that in this story, which just feels like a Wikileaks release, only with a $104m reward attached to it. Julian Assange would be livid, if only for the fact that he does in fact have a moral compass.
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If this story was told well in a movie I’m predicting an IMDB rating of 8+.

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All the players he mentions in this interview (Obama, Clinton, Holder, et al) would all be sitting in a Federal Prison if there was any rule of law in this country. Instead we have some Cowboys out west who peacefully occupied a citizen owned property being tried as the the greatest threat to this country. George W. Bush should be tried for treason for causing the loss of at least 2400 of our fellow citizens lives in a war that was based on total BS. Pretty sorry situation and there are no heroes coming to wake us all up and get this ship back on course. Take care of your own tribe and build resiliency. That is probably the only option for those of us with modest means.

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I’m not sure why, but the idea that HRC negotiated a settlement with the bank while Sec State, while WJC got 1.5 million in cash from that same source, while the Foundation got 30 million from the bank as a “loan”, just doesn’t get me outraged. I mean, I know it should. But it doesn’t.
The only banker (successfully) prosecuted is a whistleblower. We got a similar story from Harry Markopolis. They crapped all over him right up until the whole mess blew sky high in 2008. Then he got his brief moment in the sun. Now I suspect they’re crapping all over him again.
Its not governmental incompetence. It’s organized, and planned. Anyone who upsets the apple cart gets crapped on.
How come I’m not outraged? I don’t know.
Lily Tomlin comes to mind: “No matter how cynical I get, its never enough to keep up.”
If I open a bank account in a foreign country, as a US citizen I am required to fill out a US government form for each account. I am also required to report, annually, the maximum balance on each bank account. Penalties for failure to report are severe. That’s just for a failure to report.
As a little guy, I can be sure that the IRS will come down on me like a ton of bricks if I fail to report one of my six accounts. If you have a CD, that’s considered a “new account”, subject to FATCA. Roll over a CD once every 6-9 months for several years, and you get an astonishing number of accounts in a hurry. Sorting out which accounts you have to report for each year is a non-trivial exercise, because for each one you miss, that’s a $10,000 penalty. I know, its a first world problem. I’d be a little less resentful if I didn’t hear about 14,000 super-rich Americans who got wiped off a list by Sec State Crony in exchange for a big bundle of cash, from the bank, to ex-President Hubby Crony.
Ok. Maybe I am still outraged.

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Big Brother and his minions are alive and well and reaching into a pocket near you. I guess someone has to fund the purchase of all those Tomahawks and MOABs. I don’t think Donald has a contingency fund for North Korea, yet; does he?

The penalty is purely for not reporting accounts, not for taxes owing or penalties for unpaid taxes.
http://globalnews.ca/news/3309306/u-s-sues-vancouver-dual-citizen-for-over-1m-for-not-reporting-accounts/
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20 or so years ago I was in New York City on behalf of a pension plan screening investment managers for the placement of $700 million. I had lunch with one prospective manager at noon. I was then transported via limo to UBS’s offices. (I could have walked there faster.) I walk into the offices of UBS and they have a catered lunch spread that would have cost at least several thousand dollars – ostensibly on my behalf. I was introduced to several dozen people. It took me a while – I won’t reveal how long – to realize that the entire event would have been written off as a marketing expense. Who says that there is no such thing as a free lunch?

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This is one of the most infuriating things I have ever listened to in my life. It stirred thoughts in me that as a Buddhist I’d rather not entertain.

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davefairtex wrote:
I'm not sure why, but the idea that HRC negotiated a settlement with the bank while Sec State, while WJC got 1.5 million in cash from that same source, while the Foundation got 30 million from the bank as a "loan", just doesn't get me outraged. I mean, I know it should. But it doesn't. The only banker (successfully) prosecuted is a whistleblower. We got a similar story from Harry Markopolis. They crapped all over him right up until the whole mess blew sky high in 2008. Then he got his brief moment in the sun. Now I suspect they're crapping all over him again. Its not governmental incompetence. It's organized, and planned. Anyone who upsets the apple cart gets crapped on. How come I'm not outraged? I don't know. Lily Tomlin comes to mind: "No matter how cynical I get, its never enough to keep up." If I open a bank account in a foreign country, as a US citizen I am required to fill out a US government form for each account. I am also required to report, annually, the maximum balance on each bank account. Penalties for failure to report are severe. That's just for a failure to report. As a little guy, I can be sure that the IRS will come down on me like a ton of bricks if I fail to report one of my six accounts. If you have a CD, that's considered a "new account", subject to FATCA. Roll over a CD once every 6-9 months for several years, and you get an astonishing number of accounts in a hurry. Sorting out which accounts you have to report for each year is a non-trivial exercise, because for each one you miss, that's a $10,000 penalty. I know, its a first world problem. I'd be a little less resentful if I didn't hear about 14,000 super-rich Americans who got wiped off a list by Sec State Crony in exchange for a big bundle of cash, from the bank, to ex-President Hubby Crony. Ok. Maybe I am still outraged.
I felt the same thing. It seems years ago when I was a young man I would expect these kind of revelations to result in multiple hearings and investigations. I have read over a 1000 people were prosecuted during the 1980's Savings and Loan debacle. (remember the Clinton's had a hand in that also) But here we are in 2017 and I listen to the podcast above and just say "Oh well, the system is totally corrupt". Any law abiding outrage is smothered by the constant exposure to corruption and insider dealing that we are fed every day. Everything is geared for personal profit, greed, and getting over on everyone else. My hat is off to the few that still cling to hard work with little reward and being honest in their dealings. I still believe my word and a handshake mean we have reached a deal that neither of us will violate. So, sad to say I am not outraged even though I should be. What I am is sickened by a society that has sunk this freaking low in it's moral integrity and willingness to hunt and prosecute predators..
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Barnbuilder-
I look inside myself, and I realize that I’ve completely lost confidence in the rule of law - at least when it comes to anyone well-connected. When it comes to me, I’m confident the machine will grind me to dust, and that the current structure has been optimized to harvest me in one way or another.
And it’s not just the usual “things were better when I was younger” syndrome. You pointed out that at least 1000 people were prosecuted as a result of the S&L crisis. Bill Black points this out too.
Somehow our societal structure has completely lost its enthusiasm for enforcing the requirement for honest dealing for the well-connected.
When the center becomes this corrupt, the national mood ends up looking for solutions from the fringe.
We’re seeing the inevitable response from the society for this successful structural corruption now in BRExit, Trump, Le Pen, and M5S. If that group ends up not delivering the goods, the mood will continue to darken, and ultimately we’ll end up with real fascists and communists. I sure hope it doesn’t get that far.
I used to wonder how these sorts of movements came about. Why on earth would anyone actually vote for a communist or a fascist when it always ends so badly? I don’t wonder so much anymore. It happens as a result of a total loss of faith and/or disgust - the logical end product of a successful corruption of the system by the elite. It’s not envy of someone else’s success, its anger at the structural unfairness that’s been designed into the system.
Of course, when such a mood arises, it becomes relatively easy for the psychopaths to jump in front of the parade and lead it where they want it to go.
Makes you want to duck & cover.

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Kaput, corruption rampant. No way to turn ship around now. Very sad.

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Very poignant comments above. I’m with Lily now - so cynical. I don’t even bother with outrage most of the time. It seems like a waste of energy. I have a hard time listening to people lost in outrage too, even when they “have every right”. There is sometimes a barrage of very bad words running through my head, but it doesn’t seem like my outrage will have impact, so I look elsewhere for meaning. Sometimes though, a full-on, deliberate expression of outrage and rage with a good listener will clear the mind like nothing else.
It doesn’t seem there is any natural limit to the corruption, duplicity and violence of leaders. They can be counted on to do us damage. So much damage. Like a person in an abusive relationship, can we regain power by becoming aware of our own side of the story? How do we cooperate with them? Enable them? What are our blind spots? What strengths do we need to build to walk away? Is there a way to leave safely? What do we need to resolve within ourselves so that we can’t be fooled again?
Is there any chance at all that we could become a people who no longer can be fooled? Behind every insane leader is a vast population who follow them, in terror or in rightous joy. We would have to become bigger than that game - too much integrity, self-sustaining enough, informed enough, and smarter by far about our own reactivities. It seems like a lot to ask of the people we are now. But if we will be fooled, we will be abused.
It tends to look hopeless often. But after all, my brain is fairly small in a rather large Universe. It could be missing a lot! And human culture CAN deliver people of strength, integrity and intelligence. I’ve seen it happen on a small scale. I think we are on a very good track here, for instance.

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I believe that we can understand at least some the deceptions going on around us.
Who are they? How do they work? Why did it take me so long to see them? And what else have I not yet seen?
Herewego wrote:

Is there any chance at all that we could become a people who no longer can be fooled? Behind every insane leader is a vast population who follow them, in terror or in righteous joy. We would have to become bigger than that game - too much integrity, self-sustaining enough, informed enough, and smarter by far about our own reactivities.
------- The three biggest blind spot I see in our internal inability to perceive are:
1. Trust in opinion leaders to tell us what is true (when they are actually lying). If they don't mention it, it is not happening or at least is not important. 2. "I REFUSE to believe that ANYONE would .... " The classic blind spot of an empathetic person who mistakenly assumes that all others are empathetic and moral also. Some are not. Dogs are friendly. But not ALL dogs. We don't catch on because we WON'T. 3. Not wanting to have our world view crushed with shattering information.
External factors in hiding the corruption:
1. A cabal of organized deceivers can hide in plain view. They are externally visible, but their internal alliance and motivation is secret. They can work behind the scenes for a secret cause. When they take control of an organization, they control policy from the number 2 and 3 positions and keep a non-member as it public face. Like the Captain America movie where Robert Redford coopts the machinery of the LE agency, SHIELD, for an ulterior purpose. 2. The cabal hides in a crowd that is outwardly similar, but doesn't share its secret project. 100 people may belong to the larger group while only 3 of its members secretly run the deception. 30 more suspect it is going on, but are somewhat sympathetic and quietly agree to mostly stay quiet. A few will help a bit once in a while. The other 67 haven't a clue. 3. They purchase (or build) the newspapers, internet domains, search engines, surveillance infrastructure and control the flow of information. We start to only see what they want us to. Subtle hints are leaked that dissent can lead to ostracism and even "suicide."
One example is that any curiosity about the first and only explosive dismemberment of the worlds largest buildings is "crazy" and you should be ostracized for even having curiosity.
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If there is something constructive we can do about this, I’m at a loss to figure it out.
If there is nothing we can do to derail this train, then fuming about this information wastes time that is be better spent on positive solutions to actionable problems.

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Hi Les,
I really appreciate the question you are asking. I feel disgusted by the level of corruption going on. Having just come back from Rowe, I am broadening my thinking about what an actionable response it. At one point during the weekend, Chris, Becca, and Adam asked us if we regularly host and/or attend potlucks, How is this related to your question? I believe the most actionable thing we can do in response to all of the horror going on whether it’s corruption, warmongering, etc is to take some, even seemingly small step to create greater resilience in our own communities where we live. Hopefully, the fuming can fuel each of us to take action.
–Suzie

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LesPhelps wrote:
If there is something constructive we can do about this, I'm at a loss to figure it out. If there is nothing we can do to derail this train, then fuming about this information wastes time that is be better spent on positive solutions to actionable problems.
Yes, it's actionable in the sense that before one can really move into their new life and related actions with purpose, one has to release any final threads of belief that the system works for everyone equally, or that it isn't rigged, or that your leaders will suddenly develop the ability to be sensible and pull as back from the brink in the nick of time. This information tells us, pretty clearly, that the system is corrupt and gives me faith (to use that word in an odd context) that 'they' won't wake up in the nick of time to give us a Hollywood happy finish to the story. Instead, this helps me wrap my head and heart around the idea that the system is too corrupt for recovery. There's a forest fire on the way. Best to prepare for that on y/our own...there's no government rescue being mounted out of sight, ready to ride over the hill to save any of us.
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cmartenson wrote:
Yes, it's actionable in the sense that before one can really move into their new life and related actions with purpose, one has to release any final threads of belief that the system works for everyone equally, or that it isn't rigged, or that your leaders will suddenly develop the ability to be sensible and pull as back from the brink in the nick of time.
Of course you are right. I wasn't thinking about it from the perspective of people who aren't aware of what bankers have been doing. Those of us who have been following this drama for years, are unlikely to change our opinion of bankers based on this podcast. I've already come to the conclusion that this ship is going to sink without changing course. Suzie hit the nail on the head. This year, I'm shifting focus to getting to know local food growers and I'm obsessed with my garden right now. I just ordered seeds for Elderberry bushes and two types of extra hot Hatch Chilis.
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as old as humanity. As much as we seem to be biologically wired for fairness (the oft repeated monkey - grape cucumber story), we seem to be just as aptly wired for corruption. Absolute power corrupts absolutely perhaps should be written, any power or wealth at all corrupts absolutely. What’s that old saying, if you’re not outraged you’re not paying attention. This did not start with the Clinton Foundation…of course. The pendulum will swing one way and then the other, but corruption will always be with us.
When will we act? Does that mean we should give up. When things get bad enough that it starts to make doing something about it less painful and frightening then quietly enduring it, but not until then. In the mean time there is much that we can do in the way we live our lives. Every action, every dollar spent, every thought, is a vote for the kind of world we want. The belief of that our actions are meaningless is the darkness that corruption feeds on. I will bide my time, but I will not slacken the intensity and resolve, come what may. We must not let their darkness take the light out of our own lives, never. Ultimately we are in the drivers seat, as soon as we figure that out.

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But does anyone know how to get around losing 10% on the purchase of metals. I need ideas. Anyone have any?