The Enemy Inside

THIRTY-SEVEN

Privacy is the main rule. It is as old as the industry in Switzerland. And unlike other restricted relationships, the lawyer-client, the priest ah. . what is the word in English?”

“Penitent?”

“Ya, that’s it. Unlike those, violation of bank secrecy is a serious crime with large fines and prison in Switzerland. Unlike the movies, there is no total anonymity. To open an account you must identify yourself, produce a passport if you are not a citizen, and the account number is attached to your name.”

“Here, have another drink,” says Harry. “Let me fill that mug.”

Simon Korff pushes the stein across the table, his fist the size of a sledgehammer gripped tightly around the handle. He has a smile on his red face, cheeks with so many tiny broken blood vessels they look like ground beef. He is a prototypical German; you could put his smiling face and naked body on a poster and children would instinctively dress him in lederhosen. A large man, rotund, probably blond at one time, what little hair he has left has now turned gray. He is older than what I might have pictured. I am guessing late sixties.

“Not even the Swiss government can get this information except in special cases.”

Harry lifts the pitcher of dark lager with both hands and fills the stein almost to the brim. “There you go.”

“You are a good host,” says Korff.

“I like to listen to what you have to say.” Harry lifts the nearly empty pitcher, taps the glass with his finger as he looks at the waiter to bring another.

We have been here a little over two hours. Four pitchers of beer, enough food to feed an army, and Korff is still sitting upright lecturing us on banking. Strangely enough, he hasn’t asked a single question about the supposed job offer.

“You say the government cannot even get this information?” I ask.

“No. No. NO!” He grips the stein in one hand and waves his finger in front of his nose with the other. “Only if there are serious crimes,” he says.

“For example?”

“Money laundering, drugs, evidence of organized crime. It used to be that even for tax evasion the government could not find out who had what on deposit. Now,” he says, “that has all changed.”

“In what way?” I ask.

He takes another large gulp from the stein and wipes his mouth on the back of his shirt sleeve. “Well, tax evasion was not a crime in Switzerland. At least not a serious crime. It was what you call, umm. .” He searches for the term.

“A misdemeanor?” says Harry.

“That’s the word.”

“I’m beginning to like this country,” says Harry.

“Anyway. Because it was not a serious crime in Switzerland, other governments could not pursue their citizens for tax evasion on money deposited here. The Swiss government would not cooperate with them. Now that has all changed.”

“Go on,” I say.

“Your government has caused a lot of problems,” he says. “Hurt the banks. People lost jobs. All because they want the money.” He takes another drink.

“What was your job at the bank,” I ask, “at Gruber?”

“Oh. I was an officer at Gruber for twenty-two years. The last three I was what they call the anti-money-laundering compliance officer. A very important position,” he says. “It was my job to detect money laundering and to report it to the bank president and to the authorities.”

“I see. Was there much money laundering that went on?” I ask.

“Not in the beginning,” says Korff. “But toward the end before I retired, yes. It was very serious.”

“Really?”

He takes another drink and Harry fills the stein from the fresh pitcher.

“Yes. It was bad.”

“I’d be curious to know, how does a. . uh. . anti-money-laundering compliance officer discover such things?”

“Usually cash,” he says. “When someone brings large amounts of cash to deposit, that is usually a problem. Especially small denominations. It’s often drug money.”

“Are you familiar with the term PEPs?”

“You must be reading my mind,” he says. “That was the problem at Gruber. You know what it means? This PEPs?”

I nod. “Yes. Politicians, their families, people associated with them.”

“Well, when people like this, some PEP shows up at the bank and he or she has cash, sometimes suitcases full of it, you know you are in trouble. You cannot take that money, no matter how much it is.”

“And this happened at Gruber?” says Harry.

“Oh, yes.” He takes another drink. A little bit of it sloshes down onto his belly. “It was the reason I was fired. That and your government.”

“I don’t understand,” I tell him.

“Let me tell you.” He leans toward the center of the table like he wants to whisper some secret.

Harry and I join him halfway.

“The Americans wanted to go after their citizens for taxes. They pressured the big banks. Not the ones here,” he says. “The ones in Zurich and Geneva, Bern. The banks with overseas offices in the United States. After so many years of threats, the banks and the Swiss government finally said enough. They agreed to some plan to release information so that the American government could go after these people, American citizens with accounts in Switzerland. But then,” he says, “they had a problem. The PEPs.” He looks at us and wrinkles his forehead until the furry mice of brows above both eyes begin to dance.

“They had too many,” he says. “These people had accounts in banks all over Switzerland.”

I shoot Harry a glance.

“As you can imagine, this was embarrassing, hmm? They already told the press back in America that they were going to deal with these tax cheats. Now they find out there were powerful American politicians involved. And not just a few. So what to do?”

“What did they do?” says Harry.

“Consolidation,” says Korff. “They allowed the depositors, the PEPs, to move these accounts from the big banks where most of them were deposited to a handful of small banks in more remote areas. In the cantons. Because these transfers were inside Switzerland, they went unnoticed by the central banks in Europe and the United States. I don’t know whether they were informed or not. Probably not.

“What made it worse was that many of these transfers were made in cash. Large, large amounts of cash. Big bills. In the United States the largest denomination is the hundred-dollar bill. But in Switzerland we have the thousand-franc note, worth almost eleven hundred US dollars. The PEPs, the American PEPs, were showing up with multiple trunks, you know. .” He gestures extending his arms way out.

“Steamer trunks,” says Harry.

“Ya. That’s it. The steamer trunks, filled with thousand-franc notes. Truckloads of them.”

“Why not just wire the funds?” asks Harry.

“They did not want any record of the transaction other than the deposit at the bank.”

“You know, a friend of mine mentioned something about this.” I look at Harry. “You remember, what was his name? Ahh. . Graves.”

“Tory Graves,” says Harry.

“That’s it.”

“You know him?”

“Oh, yes.”

“He came to visit me,” says Korff.

“No, what a small world.”

“Yes. He was very interested in what was happening. In particular, where this money came from and how they would be able to use it.”

“Yes, we’d be interested in that as well,” says Harry. He pours more beer.

“Sure,” says Korff. “I will tell you.”