Amid President Barack Obama's vow to end off-shore tax breaks for U.S.-based multinational corporations and individuals within a decade, billionaire Igor Olenicoff, who owns homes in Laguna Beach and Florida, says from his Newport Beach office that his Swiss bankers led him to lie about his foreign holdings on U.S. tax returns, according to a story just posted on Bloomberg.com.
Since December 2007, Olenicoff and his private banker, Bradley Birkenfeld, have pleaded guilty to various tax crimes. But in the piece, the 66-year-old founder of Olenicoff Properties Inc. alleges that the U.S. government has been more lax in penalizing Birkenfeld's Geneva-based UBS AG bank than it has on Olenicoff and other individual scofflaws.
Olenicoff pleaded guilty in December 2007 in Santa Ana federal court to one count of filing a false tax return in 2002 and admitted that from 1998 to 2004 he failed to declare accounts in the Bahamas, England, Liechtenstein and Switzerland. U.S. District Judge Cormac Carney sentenced Olenicoff to two years probation and 120 hours of community service. He paid $52 million in back taxes, interest and penalties.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
With Olenicoff and Birkenfeld cooperating with prosecutors, and to avoid immediate prosecution, UBS--which is Switzerland's second-largest bank by stock market value behind Credit Suisse Group AG--agreed on Feb. 18 to pay the U.S. $780 million.
"They pay $780 million; that's lunch money for them, right?" Olenicoff rhetorically asks Bloomberg's David Voreacos. "But there's nobody being penalized for this. I have been--and I paid. There will be 52,000 Americans that will be somehow affected by their fraud. The bank needs to be exposed and needs to pay for its wrongdoing."
He alleges in the piece that UBS courted him and, once getting him in the fold, advised him to hide other assets in UBS vaults. Without mentioning individual customers, Birkenfeld confirms in the piece that bankers like him were sent to the places and events where the superrich flock to in hopes of generating new business.
Olenicoff says he had no choice but to plead guilty 1 1/2 years ago ("I would have clearly gotten my ears boxed in by the Justice Department. Once you do something wrong, you fess up to it and you pay for it."), but he is so incensed over what he considers to be the comparable kid gloves treatment of UBS that he has filed suit against the bank, Birkenfeld and dozens for co-defendants for $500 million. The billionaire vows to donate that to one of his charities.
UBS officials claim the suit has no merit and they will vigorously defend it. But even a win in court probably won't stop the bank's steep fall in fortunes since its was slammed with the triple whammy of bad press, a shitty worldwide economy and stepped-up efforts by the U.S. government to poke holes in the veil of secrecy that has allowed Swiss banks to flourish--with an assist from one of our local billionaires.