Legal
US Tax Miscreants To Launch Civil Suits Against UBS

The case of a wealthy US businessman who pleaded guilty to evading taxes but then sued UBS - where he hid his money – is due to go on trial on 8 May, the first major test of civil legal challenges to Swiss banks that sold offshore private banking services to help US nationals evade tax, Reuters reports.
The civil suit, filed against UBS in a federal court in Santa Ana, California - and another filed against UBS in a federal court in Chicago - will look at whether clients can legally rely on their private bankers' assertions there is no need to disclose the accounts on their tax returns or sign required disclosures.
The case highlights a debate over the extent to which a client taking advice from a bank is nevertheless obliged to understand whether they are complying with any relevant laws.
In the California case filed in 2008, Russian-born American billionaire Igor Olenicoff accuses UBS of fraud in handling $200 million he kept in offshore accounts and wrongfully advising him he did not have to report them to the tax-collecting IRS. Olenicoff pleaded guilty to tax evasion in 2007 and to lying on his tax returns by failing to disclose his offshore accounts, and paid $52 million in back taxes. His suit seeks $500 million in damages.
The Chicago case, which seeks class-action status, was filed in June 2011 on behalf of former UBS clients Matthew Thomas of California and Himanshu Patel of Arizona. Thomas and Patel previously paid back taxes, interest and penalties to the Internal Revenue Service related to their Swiss accounts. They accuse UBS of fraud and breach of fiduciary duty for allegedly telling them that their accounts, opened when the two worked overseas during the last two decades, did not have to be disclosed to the IRS.
UBS argues in both cases that its clients have a duty to know what to declare on their US tax returns.