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Jailed banker claims US Dept of Justice hushed investigations into “super-rich and politically powerful” US figures with Swiss bank accounts

WRS Birkenfeld audio interview 26 August 2010

Bradley Birkenfeld

Geneva, Switzerland (GenevaLunch) – Bradley Birkenfeld is not taking his imprisonment for conspiring to defraud the US government sitting down quietly. The former UBS private banking manager in the US began serving a 40-month prison sentence in Minersville, Pennsylvania in January 2010. Birkenfeld accuses the US Department of Justice of having done a deal with his former UBS boss, Martin Liechti, in an interview with WRS radio Friday morning 27 August. The reason, he argues, was to protect “super-rich and politically powerful” US citizens. The DOJ, when contacted by WRS, refused to comment on his allegations.

The interview comes the day after Switzerland said it is delivering data on more than 2,000 suspect banks accounts, to the US government at its request.

Birkenfeld, who has on a number of occasions argued that it is unfair he is the only UBS banker to be jailed in connection with the investigations, told Reuters in April 2010 that the Swiss bank should be investigated further by the DOJ, saying “Pardon the expression, but they should have some balls here.”  He has also been busy asking President Barack Obama to commute his sentence and trying to convince the IRS he should be paid as a whistleblower; in April Business Week ran a lengthy story detailing his history as a whistleblower in this and other cases, noting that the prosecutor who convinced the judge to jail him says he does not qualify.

Martin Liechti, onetime head of wealth management for UBS in North America, was arrested for questioning in the US in April 2008. In July 2008 he took the Fifth Amendment to protect himself, refusing to testify at a US Senate hearing. UBS announced at the start of the Senate hearings in July 2008 that it was shutting down its US wealth management activity.

Liechti, a Swiss citizen, remained in jail until August 2008 and then, unlike Birkenfeld, he was released. He returned to Switzerland, but officially lost his job with UBS in March 2009, when the bank took disciplinary measures against 24 of its offshore business employees.

Earlier this month, according to Tagesanzeiger (8 August) and Finews, Martin Liechti recently began working as a business coach.

Birkenfeld had denounced his boss and former employee to the DOJ and the IRS tax authority in the US in 2007, shortly after he quit his job when he and Liechti had a falling-out. The information he supplied about UBS managers’ activities in the US, data that was encrypted on their computers, led to a DOJ demand for judicial assistance from Switzerland to track down cases of tax fraud.

That in turn led to a US-Swiss treaty to cover the UBS data request. It was signed in August 2009 and provided for Switzerland to review 4,450 bank accounts by the end of August 2010 and turn over to the US any that met an agreed set of criteria for possible fraud under US law.

Birkenfeld argues that the DOJ wanted to keep Liechti from making public the names of high-profile Americans with bank accounts in Switzerland, who were caught in the web of US investigations into possibly fraudulent activity. He has been strongly supported by the National Whistleblowers Center in the US, with his lawyer, Dean Zerbe, telling swissinfo in January 2010 that a petition was being launched to support his Birkenfeld’s claim to millions of dollars as a whistleblower reward.

Zerbe was more cautious than Birkenfeld when asked why the latter was the only banker to be jailed in the case. “There is a particular Department of Justice culture when it comes to tax fraud and this views informants with suspicion, compared with other government organizations which work with them all the time,” he said.

Department of Justice head

Background on the personalities in the US case against UBS, Bloomberg