LAT: UBS whistle-blower may have forever altered Swiss banking

Bradley Birkenfeld told U.S. authorities in 2007 that he helped Americans set up secret bank accounts in Switzerland. Thousands are soon expected to be exposed for dodging U.S. taxes.

August 19, 2009 | 4:13 p.m.

In March 2006, an American employee of UBS, Switzerland's largest bank, sent a confidential letter to a top executive.

"I wish to invoke my rights listed under the UBS Whistleblowing Protection for Employees" policy, he wrote.

With that, Bradley Birkenfeld fired the first shot in the historic and devastating assault on Swiss bank secrecy that is soon expected to culminate in the exposure of thousands of Americans who used secret accounts to dodge taxes.

The high-living Birkenfeld's tale reads like a pulp thriller, complete with the international smuggling of diamonds stashed in toothpaste tubes.

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In Switzerland, where secrecy is the bedrock of a lucrative global banking industry, there are widespread fears that business will never be the same.

All of that is attributable in large part to Birkenfeld, the 44-year-old son of a Massachusetts neurosurgeon, who approached U.S. authorities in 2007 and provided an extraordinary inside account of the bank's conduct, according to court papers filed Tuesday.

One of the biggest blows to bank secrecy everywhere might be the example Birkenfeld set. If a single employee could expose bank secrets, anyone thinking of using secret accounts for illicit purposes has a compelling new reason to think twice.

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