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Ex-UBS Banker Birkenfeld Pleads Guilty in Tax Case (Update2)
By Carlyn Kolker and David Voreacos
June 19 (Bloomberg) -- Former UBS AG banker Bradley Birkenfeld pleaded guilty in federal court to conspiracy, admitting he helped a California billionaire avoid U.S. taxes.
Birkenfeld, a U.S. citizen who worked at Zurich-based UBS's private banking unit from 2001 to 2006, admitted to U.S. District Judge William Zloch today in Fort Lauderdale, Florida, that he helped real estate developer Igor Olenicoff dodge income taxes on $200 million in assets hidden in Liechtenstein and Switzerland.
``I was employed by UBS and paid a large salary and incentivized to do this business,'' Birkenfeld, 43, said today at his plea hearing. He faces a maximum sentence of five years in prison at his sentencing.
Birkenfeld has talked to prosecutors for more than a year, Assistant U.S. Attorney Jeffrey Neiman said at the ex-banker's May 13 bond hearing. UBS, the world's biggest money manager for wealthy clients, has said it's cooperating with probes by the Justice Department and the Securities and Exchange Commission.
``His cooperation is anticipated to assist the government nationwide in its investigation,'' Kevin Downing, a federal prosecutor, said at today's hearing.
Switzerland was asked by the U.S. government June 11 to assist with the probe, a spokesman for the Swiss Justice Office said June 16.
Birkenfeld and Mario Staggl, a Liechtenstein banker, were charged in an indictment unsealed by prosecutors on May 13 with helping Americans escape paying taxes. The men traveled to the U.S. to pitch tax evasion schemes, claiming ``Swiss and Liechtenstein bank secrecy was impenetrable,'' according to the indictment. Prosecutors have declared Staggl a fugitive.
Birkenfeld and Staggl were accused of helping Olenicoff, chief executive officer of Olen Properties Corp., use nominee entities and phony companies to hide assets. They told Olenicoff to destroy offshore banking records and use Swiss credit cards that they said wouldn't be discovered by U.S. authorities, according to the indictment
Olenicoff pleaded guilty Dec. 12 in Santa Ana, California, federal court to filing a false income tax return. He was sentenced April 14 to two years probation and agreed to pay $52 million in back taxes, penalties and interest.
Birkenfeld was arrested May 7 after he flew into Boston's Logan International Airport for a high school reunion, court records show. Birkenfeld was released on bond and was ordered to stay in Boston, where he was living with his brother, according to a transcript of a May 13 court hearing in Fort Lauderdale.