After that, Ms. Butrus contacted Mr. Buck via prepaid cellphones she picked up at a Walgreens drugstore. Every six months or so, she flew to Zurich to withdraw money directly from Mr. Buck. She would return to the United States secretly carrying just under $10,000 in cash — the cutoff for having to make a customs declaration.
The setup allowed Ms. Butrus to avoid paying tens of thousands of dollars in income taxes. And it wouldn’t have been possible without Mr. Buck and Bank Frey.
As much as chocolate and watches, Switzerland is known for bank secrecy. That made the country a destination for money that the wealthy wanted to hide. Last decade, it also made Swiss banks targets for an assault by the United States government, which was tired of Americans escaping taxes on money in offshore accounts.
Many banks came clean, divulging their clients to American authorities. Many Americans, including Ms. Butrus, searched for new places to park their money.
Bank Frey was among the very few to defy the legal onslaught. And Mr. Buck, a clean-cut and self-confident 28-year-old at the time he met Ms. Butrus, was the bank’s public face, responsible for landing and then managing American accounts.
That put Mr. Buck in the government’s cross hairs. In 2013, a federal grand jury indicted him for conspiring to help Americans avoid taxes. It seemed like another blow against Swiss bank secrecy.
But things didn’t go as prosecutors had planned — and the chain of events could have big consequences for America’s fight to keep people from evading taxes using offshore bank accounts.
A Small Outfit
Mr. Buck was raised in Germany. His parents had been championship ice dancers; his mother competed in figure skating for Switzerland in the 1972 Olympics in Japan.
His father ran an insurance company, and Mr. Buck figured that one day he would take it over. But an acquaintance from business school offered him a job in early 2007 at Bank Frey. The bank was tiny, with about 20 employees. Mr. Buck shared an office with four people, including the bank’s receptionist. “We all got along well,” he said.
The business revolved around clients that the bank’s founder, Markus Frey, had accumulated over the years, according to Mr. Buck and the court testimony of another former bank employee. At first, there wasn’t a focus on Americans.
Then, in 2008, a legal earthquake shook the foundations of Swiss banking. American prosecutors started filing criminal charges against bankers and executives who had set up accounts for Americans. In 2009, UBS, the huge Swiss bank, admitted helping Americans hide money from the Internal Revenue Service and agreed to provide authorities with the names of its tax-dodging clients.
Soon Swiss banks were expelling American clients.
Not Bank Frey. It didn’t have offices in the United States, and executives didn’t see it as their responsibility to police whether their clients were paying taxes.
“We decided there’s no reason not to maintain business with American clients,” Mr. Buck said in an interview. Executives consulted with legal experts to ensure they weren’t crossing any lines. “We really tried to make sure that how we did the business is correct.”
Opening accounts for desperate Americans seemed like a golden opportunity. “The positioning of Bank Frey as a solely Swiss private bank is now considered as a competitive advantage by the market,” the bank’s chief executive, Gregor Bienz, said at a board meeting in late 2008, according to records of the meeting. Mr. Bienz didn’t respond to requests for comment.
Over the next few years, hundreds of millions of dollars in American deposits flowed from Swiss banking stalwarts — institutions like Credit Suisse and Julius Baer — to Bank Frey. Its number of American clients roughly tripled, according to court records. By September 2012, nearly half of the bank’s $2.1 billion in assets was held on behalf of American taxpayers.
The Matterhorn Debit Card
Ms. Butrus was one of them. C. Richard Lucy, a former Goldman Sachs and Bank of America executive in New York, was another.
In late 2009, Mr. Lucy’s contact at Julius Baer, where he’d had an account for many years, told him he had to move it elsewhere. Mr. Lucy traveled to Zurich and met with about 15 banks. None would take his money, according to his court testimony.
There was one exception. “A couple of times the name Bank Frey came up as a bank that was new and aggressively seeking out accounts,” he testified. (He didn’t respond to requests for comment.)
Sure enough, when Mr. Lucy showed up at Bank Frey’s offices, Mr. Buck said he would open him an account.
Mr. Lucy was impressed by Mr. Buck’s assurances that his bank had nothing to worry about in the American tax-evasion investigations. “I had found what I was looking for,” Mr. Lucy said.
Mr. Lucy said that Mr. Buck arranged for him to get a Matterhorn-emblazoned debit card that didn’t have Bank Frey’s or Mr. Lucy’s names on it. Mr. Lucy was told that, when he needed money, he should call Bank Frey and ask them to load money onto the debit card. He could use it at any ATM.
Mr. Lucy wanted to bring some account documentation back to New York. He said Mr. Buck advised him not to take anything with Bank Frey’s name on it. (Mr. Buck denies giving that advice.) Mr. Lucy took a pair of scissors and snipped Bank Frey’s name and logo off the paperwork.
Back in Manhattan, Mr. Lucy bought a prepaid phone card for his calls to Zurich. He made them from a pay phone outside his apartment building. When that phone was damaged, the only other functioning pay phone he could find nearby was inside the kitchen of a boutique hotel. Surrounded by the kitchen’s hubbub, he chatted on the phone with his Swiss banker.
By the turn of the decade, other Swiss banks were booting their American customers — and handing them glossy Bank Frey brochures on the way out the door.
Mr. Buck, who eventually rose to be Bank Frey’s head of private banking, said he felt he wasn’t doing anything wrong. All the same, he warned one client, Christine Warsaw, against sending banking instructions through the United States Postal Service, she said in court. “No USPS, use fax,” she wrote in a note to herself. Mr. Buck said he didn’t tell her not to send materials through the mail.
By 2011, it was dangerous for Americans to keep their money in undeclared offshore accounts. More banks were handing over client lists to the Justice Department. If you showed up on a list, prosecutors might pursue you.
A safer option was to turn yourself in to the I.R.S. through a voluntary self-disclosure program. It allowed taxpayers to pay back taxes, cooperate with investigators and move on with their lives.
Ms. Butrus closed her Bank Frey account and eventually declared the money to the I.R.S. She paid her taxes and a stiff penalty and pledged to help the I.R.S. and prosecutors. Mr. Lucy did, too. On disclosure forms, both identified Mr. Buck as their relationship manager.
Prosecutors were hunting for bankers to hold accountable. The theory was that bankers knew they were enabling Americans to break the law and therefore were part of a conspiracy to defraud the United States government. Prosecutors turned to people including Ms. Butrus and Mr. Lucy.
By 2013, more than 20 employees of Swiss financial institutions had been criminally charged. At least a dozen pleaded guilty and received a fine, probation or both. Several hunkered down in Switzerland, which refused to extradite its citizens to the United States for actions that weren’t illegal in Switzerland.
None had actually gone on trial.
‘Do It Now’
At 5 o’clock one morning in April 2013, Mr. Buck was awakened by a phone call. Bank Frey’s chief executive was on the line. “Go look at Bloomberg,” Mr. Buck recalls him saying, referring to the business-news service.
“I’m sleeping,” Mr. Buck said he replied.
“Do it now,” his boss ordered.
Mr. Buck pulled out his cellphone. There it was: an article saying he had been indicted.
Terrified, Mr. Buck skimmed the indictment. The indictment made clear that his former clients were assisting the government. “It was surreal,” Mr. Buck said.
Mr. Buck, 32 years old at the time and single, went to work to hand in his I.D. card and cellphone. He was placed on paid leave; the bank would cover his legal expenses.
Then Mr. Buck headed to his sister’s house. It was her husband’s birthday, and they were hosting a barbecue.
His sister, Sylvia Muther, was nearly nine months pregnant. “We were scared he’d go to jail,” she said. “We tried not to think about that.”
“I got hammered,” Mr. Buck said.
Mr. Buck spent months weighing his options. He could plead guilty and be done with it. He could spend the rest of his life in Switzerland, which wouldn’t extradite him. Or he could fight the charges.
That third road was perilous. If Mr. Buck won at trial, he would be free — and the Justice Department’s fight against bankers who enable tax evasion would be dealt a serious blow. If he lost, he was looking at up to five years in prison.
In October 2014, one of UBS’s top executives, Raoul Weil, went on trial in Florida. Federal prosecutors accused him of helping clients hide billions. Mr. Weil’s lawyers argued he had no knowledge of or responsibility for what had happened. The jury deliberated for barely an hour before acquitting him.
The same week, a Los Angeles jury acquitted an Israeli banker who faced similar accusations. The Americans’ pursuit of foreign bankers no longer looked invincible.
A few months later, on a cloudy morning in January 2015, Mr. Buck was skiing with friends in the Swiss Alps. Above the tree line, they started their descent.
A sign on the slope marked the boundary between France and Switzerland. Mr. Buck realized he was crossing an international border — and that meant he theoretically could be picked up on an American arrest warrant in France. “I was scared,” Mr. Buck said.
He told his friends to continue without him. He snapped off his skis, trudged back up the slope and skied down the Swiss side of the mountain.
Mr. Buck realized he couldn’t spend the rest of his life fearful of crossing a border. “There was no way I was just going to stay in Switzerland,” he said.
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