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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, August 14, 2012

UBS Sues Billionaire Olenicoff For Malicious Prosecution in Offshore Tax Fraud Case

IgorForbes:  UBS Sues Billionaire Olenicoff In Offshore Tax Cheating Case, by Janet Novack:

UBS, Switzerland’s largest bank, has sued California billionaire developer Igor Olenicoff for malicious prosecution, charging he pursued a meritless federal lawsuit against it built on lies in part to “deflect blame” from his own offshore tax sins.

The suit, which UBS quietly filed in Orange County Superior Court last week, also names Olen Properties Corp., and two of Olenicoff’s lawyers as defendants, and asks for punitive damages, as well as compensation for damage to UBS’ reputation and the $3 million in attorneys’ fees UBS spent defending itself against Olenicoff’s now-dismissed federal suit. UBS’ attorneys in this case, as in the federal one, are from the pricey and prominent law firm of Gibson, Dunn & Crutcher.

In Dec. 2007, in a deal with federal prosecutors, Olenicoff, one of the 400 Richest people in America, admitted he had lied on his tax returns about his ownership of foreign accounts from 1998 through 2004, paid $52 million in back taxes, penalties and interest for those years, and pleaded guilty to a single felony of filing a false 2002 tax return. Then, in September 2008, he turned around and sued UBS and others, claiming they had mislead him about the legality and taxation of his secret offshore accounts. ...

Another one of those Olenicoff sued, Bradley Birkenfeld, his UBS banker, has a request for court costs from Olenicoff pending in federal court. Birkenfeld helped the government build its case against UBS. But while Olenicoff, now 70, escaped without jail time, Birkenfeld was sentenced to a stiff 40 months in jail for conspiracy after prosecutors decided he hadn’t been forthcoming about Olenicoff’s enormous offshore accounts. Birkenfeld, 47, was recently released to a halfway house and is scheduled to be released from federal custody at the end of November. He is still pursuing a claim for an informant’s reward from the IRS for his role exposing UBS.

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Man bites dog. Dog retaliates.

Posted by: Jake | Aug 15, 2012 6:18:18 AM

Fraud is so rampant among the moneyed classes that now they sue each other for the inconvenience if they get caught. UBS blatantly, and I mean blatantly, marketed secret bank accounts to 17,000 Americans according to the NYT.

Igor got away with two years probation for his $52 million in secret accounts.

Posted by: Jim Harper | Aug 15, 2012 11:54:20 AM