The New York Press
Money Changes Everything
March 7, 2001
by, Michael Yockel
Money Changes Everything
March 7, 2001
by, Michael Yockel
When the cops finally nabbed Juerg Heer on Oct. 4, 1997, he was warming his bones in the southern Thai resort town of Hat Yai. Located on the Gulf of Siam not far from the Malaysian border, Hat Yai was millions of miles, at least figuratively, from Heer’s home in Zurich, the starting point of an on-the-lam odyssey that lasted nearly five years. During that time, the 61-year-old former senior Swiss banking officer chugged through Italy, Turkey and Azerbaijan before settling in Thailand.
Back in the summer and fall of 1992, Heer stood at ground zero of a cataclysmic scandal that roiled the privately held Rothschild Bank AG Zurich, a branch of the vast, respected and centuries-old European financial house built by the aristocratic Rothschild family. After serving for more than 20 years with the bank (opened in 1968), the last nine as its credit manager, Heer was dismissed in June 1992. Rothschild officials accused him of taking what they termed up-front "kickbacks" in exchange for making unsecured and unapproved loans to German-born Canadian real estate magnate Karsten von Wersebe–agreements that ultimately resulted in a $155 million loss to the bank when von Wersebe's house-of-cards property empire toppled in 1991.
Detained by the Swiss district attorney's office in late July 1992, Heer was held in custody–but never criminally charged–while the government investigated the bank's allegations. Rothschild Bank AG Zurich contended that Heer fraudulently pocketed more than $20 million from his dealings with von Wersebe, working outside the knowledge of its board and auditors, then misrepresenting his actions when confronted with the $155 million ledger debit. (Additionally, he supposedly broke Swiss Banking Commission regulations by lending more than 20 percent of the bank's capital to one client, von Wersebe.) While Heer acknowledged receiving the $20 million, he explained that the money derived from "commissions" on transactions wholly endorsed by his superiors.
Either way, he knew how to spend it, purchasing 80 vintage automobiles, an enviable collection of modern art, a small flotilla of boats and cellars brimming with fine wines in his luxuriously furnished homes in Switzerland and Spain.
Herr Heer saw himself as a scapegoat, a sacrificial lamb offered up by the bank's new broom, chairman Sir Evelyn de Rothschild, who took over from longtime chairman Baron Elie de Rothschild in July 1991. Released from "investigative arrest" in October 1992, Heer fought back, disregarding the Swiss financial fraternity's unwritten vow of silence: he blabbed to U.S., German, Swiss and Italian newspapers about a multitude of convoluted and hair-raising improprieties, irregularities and outright illegalities at the bank, which reached all the way up to Baron Elie and vice chairman/former general manager Alfred Hartmann.
Heer launched his opening salvo in November, telling the Swiss paper Sonntagszeitung, "I was part of a criminal system," then proceeding to relate how the Zurich bank, renowned for managing the accounts of Europe's richest families, had routinely concealed the assets of its clients, many of them Italian, by setting up shell corporations under its trusteeship.
According to Heer, it worked like this: a client signed over his assets to a trustee–sometimes someone at the bank such as Baron Elie, Hartmann or himself, sometimes a dependable outside associate–with the proviso that they could be bought back in the future at an agreed-upon price. Then the assets were transferred to a holding company established by the bank. One such phony firm, the Panama-based Orion, was a popular destination; Orion, in turn, begot offshore subsidiaries for similar purposes. In this way clients avoided taxes and other monetary controls back home, while bank officers, Heer included, netted millions in handsome commissions for services rendered. This, Heer asserted, was standard operating procedure, as were the labyrinthine loans he made to von Wersebe and others.
Occasionally foreign tax officials became suspicious. In one case, Heer recalled, he flew to Rome, where he knowingly lied in court in an effort to allay concerns about the true ownership of Italy's sixth-largest insurer. When Baron Elie declined to comply with a similar summons, Heer added, the Italian judges flew instead to London, where the baron plied them with food and drink and falsehoods before sending them on their way singing "For he's a jolly good fellow." Heer also tarred Hartmann, who in addition to his positions at the Zurich bank served as chairman of the Swiss branch of the notorious and now-defunct Bank of Credit & Commerce International; Heer alleged that Hartmann used the familiar dummy-company stratagem to funnel BCCI money from Nigeria.
Just warming up, Heer got personal, accusing Baron Elie of keeping a stable of mistresses, one of whom bore him a child.
Most sensationally, Heer recounted a potboiler indirectly connecting his bank to the death of Roberto Calvi, chairman of the collapsed Banco Ambrosiano, who was found dangling under London's Blackfriars Bridge in June 1982, his pockets filled with bits of bricks and $15,000 in sundry currencies. Later that same year an associate of a higher-up in Italy's banned P2, the shadowy Masonic lodge with ties to the Mafia, phoned Heer requesting his participation in a secret mission. After giving his assent, Heer received at the bank an envelope containing half of a torn dollar bill, plus a leather suitcase. A few days later two men arrived at the bank driving an armored Mercedes; one of them produced the matching half of the dollar. Heer duly delivered the suitcase. Shortly thereafter, in a conversation with his P2 contact, Heer inquired as to the nature of the mysterious exchange, and was informed that the suitcase had been stuffed with $5 million in P2 cash–"money for the killers of Calvi."
Not surprisingly, Rothschild Bank AG Zurich senior staffers went into damage-control overdrive denying Heer's allegations. "It's all nonsense," one groused to London's Sunday Times in February 1993. "This man is a compulsive liar."
True or false, Heer's revelations succeeded in sending some of the bank's more jittery clients scurrying for the exits, as they withdrew their money and deposited it elsewhere. Sir Evelyn reacted swiftly, hiring a p.r. firm to quell the brouhaha. "What Heer is saying is blackmail," he huffed to The Wall Street Journal in December 1992, while suggesting that Heer's intent was to steer the bank toward a substantial out-of-court settlement. "He's trying to muddy the waters to [imply] that it was all crooked. But it wasn't."
Turning up the heat, the bank sued Heer for violating client confidentiality. This merely pissed him off even more. "I'll spoil this show for them," he railed to the WSJ. "You can be sure of that."
No idle saber-rattler, Heer popped up in a Zurich probate court in December to testify against his former employer in a messy inheritance case concerning the disputed billion-dollar estate of Count Corrado Agusta, deceased scion of a family that owned an Italian helicopter manufacturer. Agusta's widow, Contessa Francesca, from whom he separated in 1986, claimed that Rothschild Bank AG Zurich had conspired with Riccardo Agusta, the count's son from an earlier marriage and his principal heir, to conceal a considerable portion of her husband's assets after his death in 1989. Italian law entitled the contessa to at least one-third of the estate. Under oath, Heer swore that the bank's attorney had connived with Riccardo to deny Francesca her rightful inheritance.
Then, clutching his passport, Heer took off for a holiday in Thailand, agreeing to return for a March 1993 court hearing in connection with the fraud charges leveled against him. But when he failed to show in March, an international warrant for his arrest was issued, and Heer began his four-and-one-half-year fugitive's existence.
Born into a prosperous Zurich banking family in 1936, Juerg Heer initially worked for Swiss Bank Corp., where his performance caught the eye of then-Rothschild Bank AG Zurich general manager Gilbert de Botton. In 1972, after the two men met at a dinner party tossed on behalf of Andy Warhol, de Botton wooed Heer from Swiss Bank Corp. (De Botton left for a post in London in 1981, replaced by Hartmann.) Heer thrived under de Botton's mentorship, immersing himself in a pampered lifestyle. In 1974, for example, he bought the first of his parking lot's worth of vintage cars: a 1954 Mercedes 300. Later he added a clutch of Ferraris. "Money was always important for me," he told the Journal. "I have always had so many hobbies." Well, yes, including collecting art: Heer set about acquiring works by Warhol, Alberto Giacometti and Jean Tinguely, among others.
All the while he savored his proximity to his baronial boss. "I admired Elie," Heer confided to the WSJ. "He is a huge showman, and somehow my role model. He was a royal crook, and I helped him. I found it marvellous."
Still, Heer's status did not exempt him from Baron Elie's occasional tirades. At a restaurant conclave arranged by Heer for the bank's board of directors, Baron Elie reportedly berated Heer, finding the establishment substandard. This unfortunate dining decision so infuriated the baron that he threatened to dismiss Heer, who survived only after his colleagues intervened to save his job the following day.
Ultimately, though, it was Sir Evelyn, and not Baron Elie, who sacked Heer and attempted to characterize him as a rogue run amok, a knave who deceived the bank's unsuspecting board regarding his loan activities. This approach garnered little sympathy among Zurich's banking home guard.
"They are foreigners and foreigners never make it in Zurich," one local banker divulged anonymously to London's Daily Telegraph in February 1993. As Sir Evelyn and his gray-suited brigade manned battle stations, the locals shook their heads, admonishing, as the unnamed source told the Telegraph, "Why didn't you do it the Swiss way? Why didn't you send this man to some island somewhere, make him comfortable, and make sure he never came back to talk?" That probably would have suited Heer just fine. But Rothschild officials refused to allow him to make off with what they considered the wages of pecuniary sin, and he, after telling tales out of class, vamoosed: to Italy, to Turkey, to Azerbaijan and, finally, in the summer of 1996, back to Thailand. After 16 months there, however, Heer apparently wore out his welcome with someone. Quite suddenly, Thai tourist police, working with Swiss cops and Interpol, pinched him in early October 1997, charged him with immigration violations and shipped him to a Bangkok detention center for illegal aliens. One of his protectors, it would appear, had finked on him.
At first Heer admitted to entering Thailand on a bogus Hungarian passport, but, fearful of repatriation to Switzerland, he soon changed his story, and at four separate hearings he denied unlawful immigration. To help jog his memory, Thai authorities relocated him to Lad Phrao jail, north of Bangkok. A month there took its toll. In late November a visibly exhausted, wan and thin Heer finally pleaded guilty in a Bangkok court, which fined him $75, handed him a 30-day suspended sentence, and turned him over to Swiss policemen to be escorted home.
Although a month's stay in the squalor of a Thai jail no doubt proved extremely unpleasant, it did not alone account for Heer's poor physical condition: Sometime during his flight from the law he had developed AIDS. So a Swiss judge placed him in protective custody in a Bern hospital until he recovered sufficiently to stand trial. When he finally came before a Zurich district court in September 1998, the formerly combative Heer, now 62 and enfeebled by the disease, readily confessed to embezzling 55 million Swiss francs ($33 million) from Bank Rothschild AG Zurich between 1986 and 1992. When questioned by the court's judge about his alleged misconduct, Heer repeatedly responded, "I don't want to recall it all. But it must be right if you say so."
Accordingly, the court found him guilty. It also fined him $7350 for 1) participating in a scheme that attempted to extort cash from three former bank clients during his time on the run, 2) using forged passports and 3) breaching bank confidentiality rules. Added to that were court fees of $22,000. Final sentence for his multiple transgressions: four years in prison (the district attorney had asked for six), with the nine months Heer spent in detention awaiting trial put toward time served. He immediately gave his benediction to the sentence, promising not to appeal.
Paroled last year, Heer emerged to live primarily at Zurich Lighthouse, an AIDS hospice, where he died, age 65, on Feb. 21.
"The bank won't survive," Heer hissed to The Wall Street Journal in late 1992. "They don't want to close it, but I will make sure of it." Fall guy or wise guy, he was wrong nonetheless. The bank endured. He didn't.