Banking Espionage

German-Swiss Tax Spy Scandal Nothing But Lies

Abendliche Spiegelungen in Frankfurt/Main
Scene of the crime: The InterContinental hotel in Frankfurt, where Daniel M. was filmed by master spy, Werenr Mauss. Source: DPA

It’s a complicated tale of double agents, international intrigue, diplomatic fallout and Swiss banking. German politicians dubbed the affair a cross-border scandal and a genuine “spy thriller”; senior ministers made concerned phone calls to their Swiss counterparts.

Six weeks ago, a Swiss man, known as Daniel M. was arrested in Germany, accused of spying on German tax investigators for the Swiss. His arrest sparked a political spat between the two countries and shed light on two sensitive topics: How the Germans have pursued tax offenders and how Switzerland protects its banking secrecy.

But this week Daniel M.’s lawyers are saying that every part of the story their client told was a lie and that he should be released; basically, they are implying that the whole case has been a big deal about – quite possibly – nothing.

On a Tuesday in late November in 2014, a former Zurich policeman, Daniel M. was sitting on a brown sofa in the InterContinental hotel in Frankfurt, counting money. The former member of law enforcement, by all accounts a brilliant undercover investigator, was relaxed as he put €20,000 in a white envelope. He had received the money for the few pages of information he just handed over.

The only problem is, it appears that almost everyone involved in this case has been lying.

On those pages were – apparently – details and names of German citizens who were evading the tax authorities back home, by using Swiss bank accounts. Daniel M. had just sold the information to another man, Wilhelm D.

It’s possible that Daniel M. never got to spend that wad of cash. He was arrested in Germany at the end of April this year.

The story really began in in 2000, when Daniel M. left the Zurich police force and began working for Swiss global financial services company, UBS, where his responsibilities involved everything from security for board members to catching money launderers and fraudsters. In 2010, Daniel M. left UBS for self-employment as a private investigator.

This was also the year that the Swiss banking authorities felt they were under attack by German authorities. In March that year, officials in the German state of North Rhine-Westphalia paid €2.5 million for a CD loaded with client data from another Swiss banking giant, Crédit Suisse. Then in October the Germans paid a further €1.4 million for client data from the Swiss bank Julius Bär. It was all about catching German tax evaders: The data from Crédit Suisse alone is supposed to have triggered 1,000 investigations and garnered €900 million in unpaid taxes in Germany. The state of North Rhine-Westphalia says it bought 11 CDs, that led 120,000 German citizens to self-report their own Swiss bank accounts.

14 p11 Unhappy Tax Evaders-01

Both Swiss banks and Swiss politicians were upset, accusing their neighbors of receiving stolen data. In fact, the Swiss even said they wanted to detain Peter Beckhoff, the head of the Wuppertal Finance Office for Tax Crime and Tax Investigations, who was apparently behind the data-buying idea.

Despite the international uproar, the German authorities kept at it. In August 2012, North Rhine-Westphalia paid another €3.5 million for data which incriminated, above all, the Swiss bank UBS.

At this stage, Daniel M. obviously saw an opening because he too apparently began selling client data from Swiss banks. Why he decided to do this remains uncertain. No matter what his motivation though, one thing is clear: Daniel M. ran into the wrong guy.

Werner Mauss is a long-time German private investigator originally from Essen, who is something of a legend in security circles: He once said James Bond films were too boring for him and there are rumors about him working in the jungles of South America, negotiating with terrorist organizations and hunting diamond thieves.

Mr. Mauss was also in the Frankfurt InterContinental that day, with Daniel M. and Wilhelm D. But he was in the room next door, having bugged the room, and was recording the meeting between the two.

His mission: To put a stop to the German trade in Swiss banking data.

Mr. Mauss and his assistant, real name Wilhelm Dietl, lured the former investigator to the hotel with the promise of thousands of euros, in exchange for the banking data. Only problem was, Daniel M. was also making it up: The information he gave them was – apparently – also counterfeit.

Three months later Daniel M. was taken into custody by the Swiss authorities. As soon as the former policeman realized he had been being filmed by Mr. Mauss – whose own mission still remains mysterious: nobody knows if he was working for the Swiss authorities or the Swiss banks – he added another lie to his collection.

Daniel M. said he had actually been doing work for the Swiss intelligence authorities. By pretending to deal in client data from Swiss banks, he was trying to trap the real criminals, the German tax investigators. The spy master and the ex-policeman had conned one another. The Swiss dropped the case against Daniel M. and he was released.

But this complex tale doesn’t end there. In 2016, Mr. Mauss’ name cropped up in the Panama papers, a trove of documents relating to a Panamanian law firm that specialized in setting up anonymous offshore financial deals, released by investigative journalists in April that year. The documents implicated hundreds of individuals and institutions who had set up secretive accounts. Mr. Mauss was one of them.

Whether by coincidence or not, Mr. Mauss’ notes about the Daniel M. case came to the notice of German authorities as they investigated Mr. Mauss. And it certainly got their attention: What was a private individual doing, spying on German tax investigators, on behalf of the Swiss secret service?

A new investigation into Daniel M. started as a result, but this time in Germany. On December 1, 2016, an arrest warrant was issued, and on April 28, 2017, police officers detained him at a hotel in Frankfurt, saying he “had been active in the secret service of a foreign power”. Daniel M. remains in a Mannheim jail to this day. There is danger of Daniel M. absconding, the authorities say, so that’s why he must remain there.

Thanks to his lawyers, Daniel M. is to have his day in court next week, a custody review hearing on June 21 in the German Federal Supreme Court. And it should be a memorable event.

His lawyers sent a letter to the German prosecutors Monday. Their client was a victim of his own lies, they said. He had never identified any German tax investigators to the Swiss. In fact, the Swiss were already investigating three German tax investigators back in 2010 and the Swiss secret service didn’t even contact Daniel M. until 2012. The prisoner himself admitted he had been fibbing to everyone – he told the Swiss he had been lying to Mr. Mauss. Now he told the Germans, he had been lying about that too.

His lawyers say that the whole case against Daniel M. is built on his testimony in the Swiss case – which was all untrue.

As a result, Daniel M.’s lawyers have asked for a custody review hearing, arguing that the warrant for his arrest should be repealed. One of the witnesses they have named for the hearing is Paul Zinniker, head of the Swiss intelligence service, the NDB. Another is Carlo Bulletti, the Attorney General of Switzerland. The issue is whether they paid Daniel M. for some fictitious stories.

Whatever his motives, it seems that Daniel M. hasn’t been very successful. He did not get rich, he didn’t help catch any tax evaders, nor did he conclude any sort of successful investigation or avoid arrest.  If his lawyers are correct, then the one thing he has done a brilliant job of, is making a lot of officials in both Germany and Switzerland look pretty silly.

Sönke Iwersen leads Handelsblatt team of investigative reporters and Volker Votsmeier is an editor with Handelsblatt’s investigative reporting team. Contact the authors at: iwersen@handelsblatt.com, votsmeier@handelsblatt.com

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