Swiss banks and tax evasion: spy verdict expected in German court
Rarely has a spy case attracted so much attention in Germany as that of Daniel M. The bungling double agent passed on troves of bank data to German tax officials while allegedly gathering info on them for the Swiss.
As far as the chronicles of the great espionage stories go, Daniel M. is likely to be little more than a footnote. In his short career as a spy, he had two missions, and he was arrested both times. And yet, his activities almost managed to spark an international diplomatic row between Germany and Switzerland.
It all started with Switzerland’s protection of bank secrecy — a thorn in the side of North Rhine-Westphalia’s (NRW) former state Finance Minister Norbert Walter-Borjans. Known as the “Robin Hood” of taxpayers, he was determined to break the code of secrecy, at least concerning the data on those Germans who had sidestepped tax officials by parking huge sums of money in Swiss bank accounts.
Over the years, Walter-Borjans spent millions buying a total of 11 CDs that contained secret financial data from Switzerland. But the expense paid off. The state of NRW says it recovered billions in tax revenues as tax evaders — millionaires, dentists and CEOs — suddenly felt called to turn themselves in and retroactively pay up. All because of Daniel M.
The forgotten briefcase
In 2007 Daniel M., then an employee at the Swiss bank Credit Suisse, finished work in Zurich and went straight to the gym, carrying with him a briefcase containing handwritten details on some of his bank’s German customers. He accidentally left the case at the gym when he went home. One of his gym buddies found the potentially explosive papers, and they decided to work together.
The arrest of Deutsche Post CEO Klaus Zumwinkel in February 2008 on suspicion of tax evasion gave them an idea. If this prominent German businessman was of interest to the German justice officials because of money he had illegally parked in Liechtenstein, then surely the authorities would also be interested to learn more about German tax evaders’ activities in Switzerland. The duo eventually agreed to sell their data to finance authorities in NRW for €2.5 million ($2.9 million). That was the first CD bought by German tax fraud investigators.
First arrest, then Swiss secret service
But the pair’s amateurish action was soon discovered. When the Zurich police found the large sums of money in the accounts of the two otherwise average earners, they knew they had the whistleblowers and their contacts in NRW. Daniel M. was sentenced to 24 months on probation. His accomplice’s dream of earning a quick buck had a more deadly ending — he killed himself in prison.
But the Swiss authorities were not ready to let the matter go. They also wanted prosecute the recipient of the CD, since from their point of view, the data possession was a matter of treason. And they knew who was behind it all: Peter Beckhoff, the head of Wuppertal’s tax crime and evasion office — and NRW minister Walter-Borjans’ indispensable helper.
Beckhoff is something of a legend in his line of work. He had little understanding for the Swiss protection of bank secrecy, which many Swiss view as akin to a human right. The alpine nation viewed Beckhoff’s investigation into the secret world of Swiss bank accounts as a form of economic espionage. The Swiss secret service (NDB) was determined to stop Beckhoff, even if that meant arresting him. In 2012, they issued a warrant for Beckhoff, and Daniel M. was brought on board to help in his capture.
Before going to work at Credit Suisse and also at UBS, Daniel M. had spent 16 years working for the Zurich police. Later, he started his own security company. His mission: to place a mole among the NRW tax authorities.
Things really took an exciting turn when Daniel M. was recruited by a German agent under a pretext. Former top German spy Werner Mauss is a professional, unlike Daniel M. And the pro-agent himself was entangled in tax offences. One of Mauss’ aliases was included on one of the data CDs bought by the Germans.
Mauss informed the Swiss bank UBS that he knew someone — a former employee to be precise — who was selling confidential customer information. This alarmed the Swiss police. Some 50 agents start searching for the amateur spy, made out by Mauss to be the head of a highly criminal organization.
As part of this operation against Daniel M., Mauss had access to the investigators’ files, which he then turned over to the German prosecution as part of his own tax evasion case. From that point, it did not take long for Daniel M. to be arrested for the second time — this time by German police for having gathered info on the NRW officials tasked with tracking down tax evaders. That was the end of a bungled espionage web that almost turned into a diplomatic dispute between Germany and Switzerland.
On Thursday, a court in Frankfurt is due to deliver a verdict in the case against Daniel M. He has given officials a thorough confession. And it is now clear just how harmless a “double agent” he really was. After serving six months in jail awaiting trial, it is unlikely that he will have to go back to prison. On the contrary, Agent Double Zero, as the German newspaper Süddeutsche Zeitung has mockingly called Daniel M., wants to work again as a private investigator in Switzerland.
Another interesting development: under today’s regulations, the whole affair could never have happened. That’s because Swiss banks now only accept German customers who comply with tax laws. And starting in January 2018, German tax officials will automatically receive banking details about Germans holding Swiss accounts.