June 8 (Bloomberg) - California billionaire Igor Olenicoff has invested $ 200 million, with UBS AG in 2001 when Swiss banker he ushered him to the bottom of the pit in Geneva.
Olenicoff, a real estate developer with a taste for yachts and art of Russia, see the floor the floor safe-deposit box. His private banker, Bradley Birkenfeld, and colleagues show Olenicoff own room for valuables.
"They said, 'What you want - the company stock, cash, gold, silver - put it here," said Olenicoff, 66, in Newport Beach, California, headquarters of Olen Properties Corp., a company founded in 1973. "That's the aura of legitimacy and confidential. They said, 'We the world's largest wealth manager,' so what question?"
Birkenfeld, 44, has spent years wooing Olenicoff, he visited the house in Laguna Beach, California, and Lighthouse Point, Florida; resources on the 147-foot (45 meter) yacht to the Mayan ruins of honduras, and are on the Cessna Citation II jet .
Four years later, men who admitted felons. Since December 2007, and billionaire banker has pleaded guilty tax crimes.
The court case opened the door normally reticent dummy companies in the world, and offshore financial havens phony filings rich American who used to avoid paying U.S. taxes. President Barack Obama has proposed to end tax breaks such as the US-based multinational corporations and individuals in a decade.
'Liability Citizenship'
"Most of the United States meet their obligations because of their sense of civic duty," said Obama on May 4. "But there are other people that they are shirking. We should not let some people dodge their responsibilities, while the United States usually take the slack. Unfortunately, from what we do."
Birkenfeld Olenicoff and that the cases come amid widening U.S. crackdown on foreign companies that rich food to the United States. U.S. Senator Carl Levin, a Michigan Democrat, the estimated cost in the tax that has not paid U.S. Treasury is $ 100 billion a year.
Olenicoff with evidence from the case and the cooperation of Birkenfeld, U.S. prosecutors have been able to penetrate the veil that seems the Swiss financial watchdog as a national treasure.
Immediately to avoid prosecution, UBS, the Swiss second largest bank by stock market value, behind the Credit Suisse Group AG, agreed on Feb. 18 to pay U.S. $ 780 million.
It renewed the pledge to stop the unlicensed recruiting customers in the U.S. and agree to cooperate with investigators during the 18 months of probation. Bank of America recognizes that the court has helped clients dodge taxes 2000-2007.
52,000 UBS Account
Bank to be more information about more than 250 customers - which has never occurred in violation of Switzerland's secret stronghold. The U.S. Internal Revenue Service is suing UBS in federal court in Miami to get the United States 52,000 customers who have the laws U.S. tax break.
UBS is fighting back. The Bank said on April 30 court filings that the U.S. effort will force the Swiss bank employee in violation of criminal law barring disclosure of confidential account information. Swiss government says the U.S. is trampling on the sovereignty.
If the bank failed to convince a federal judge should not reverse the name to the IRS, the court can apply for UBS civil humiliated. In the Department of Justice, under the deferred-prosecution agreement, may seek criminal charges from the bank, said lawyer Robert Fink's tax Kostelanetz & Fink LLP in New York.
'They're Totally Whipsawed'
An indictment of the bank can be shut off if the customers doubt their stability.
"That could be the most dangerous of all UBS," said Fink, who represented 200 companies UBS clients. "UBS is on the road to destruction in the U.S. They're totally whipsawed. If they are indicted, they will be convicted. Finally, they will lose their banking license."
Fink said the global financial meltdown in the past 18 months to save UBS in May. "The U.S. government said in May we can not put the bank's main business," he said.
UBS is the battle to avoid prosecution and to protect the confidentiality of the bank is another challenge for the Chief Executive Officer Oswald Gruebel, a former head of Credit Suisse, UBS is taking over in February. Crushed by subprime-debt losses, UBS posted a loss $ 16.8 billion for 2008, the largest ever by a Swiss company.
The Bank has announced more than 18,500 job cuts in the past 18 months and has amassed more than $ 50 billion in writedowns and losses since 2007, most of the faltering U.S. mortgage debt. On 5 May, the bank announced a first quarter loss of $ 1.75 billion.
'Biggest Ever'
Since April 2, prosecutors have charged two UBS clients in Florida with filing false tax returns. UBS hundreds of clients in the United States may face prosecution, said Edward Robbins Jr., a Beverly Hills, California, lawyer who represented Olenicoff tax.
"This may be the biggest tax because the criminal investigation had involved the dollar combined with a number of criminal defendants, either in the United States and UBS account level," he said.
U.S. prosecutors say UBS $ 200 million a year to manage $ 20 billion in assets for United States customers. Birkenfeld, a neurosurgeon working children in Switzerland for three international bank, working with prosecutors and Senate investigators in the U.S. road map laying out how courted clients such as UBS Olenicoff.
'Is this a Massive Machine'
"This is a great engine," Birkenfeld to Senate investigators on Oct. 11, 2007. UBS banker said crisscrossed the U.S. - without the necessary license from the Securities and Exchange Commission - to look for rich American consumers.
"You may go to car shows, wine tastings," says Birkenfeld. "You may be related to real estate agents. You may be dealing with attorneys. It's really: How do the rich people hang out? Go and talk to them."
Some 60 UBS private bankers trolled for clients at UBS-sponsored art shows, yachting regattas, and golf and tennis tournaments, Birkenfeld said.
He toted a number of bank check customers in Europe and buy a diamond for a client, smuggling them to the U.S. in a toothpaste tube, he said in a conspiracy to guilty in federal court in Fort Lauderdale, Florida, in June 2008.
With the act as Couriers, UBS bankers that allows clients to evade U.S. surveillance system reviews a large transfer of money. That the program is intended to prevent fraud, money laundering and terrorist funds by the movement.
Laptop encryption
Such transactions often trigger the filing of a so-called suspicious activity reports financial Department. Sign of the people can request an investigation into the source of money.
The Bank has many schemes to avoid getting caught by U.S. regulators, Birkenfeld to the Senate investigators. UBS bankers brought a laptop computer is encrypted, the Swiss bank and train its staff to avoid detection by U.S. authorities.
Bankers who falsely said that they are in the habit of traveling for pleasure, not business, and told clients to destroy notes that offshore can be bound to UBS, Birkenfeld said in pleading guilty.
"Very few people would imagine the level of involvement of UBS bankers and executives," said Josh Ungerman, tax lawyer at the Meadows, Collier, Reed, Cousins & Blau LLP in Dallas. "It's almost unbelievable that a major bank in the world who is also respected akan have employees who are involved in the type of behavior."
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