A former UBS banker pleaded guilty in federal court Thursday to helping an unidentified billionaire real estate developer hide $200 million in assets from U.S. tax authorities.

Bradley Birkenfeld, a 43-year-old U.S. citizen, told a court in Fort Lauderdale that he was a UBS

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[UBS  Loading...      ()   ] banker at the time, received a large salary, and was "incentivized" by his employer to carry out the activities that led to the charges.

He had previously pleaded not guilty. His change of heart and subsequent plea deal could affect an ongoing U.S. investigation of UBS's conduct in relation to services it provided to U.S. clients from 2000 through 2007, and crack open Switzerland's much-vaunted tradition of banking secrecy.

"He's going to tell the government everything he knows about what was going on at UBS," Birkenfeld's lead attorney, Danny Onorato, told reporters after his court appearance.

U.S. media have reported that UBS is considering whether to reveal the names of up to 20,000 wealthy American clients as federal authorities intensify the probe into offshore bank accounts.

In evidence he gave the court, Birkenfeld said he and other UBS bankers helped the bank earn $200 million a year managing around $20 billion in assets held in offshore tax havens and concealed from the U.S. tax authorities by wealthy Americans, the U.S. Attorney's Office for the Southern District of Florida said.

"Mr. Birkenfeld had numerous U.S. clients. A number of these individuals have been reaching out to U.S. authorities as a result of Mr. Birkenfeld's case," Onorato said.

Unsealed last month, the grand jury indictment against Birkenfeld charged him with conspiring to defraud the United States by helping the unidentified U.S. billionaire create bogus corporations and other entities to conceal the ownership of hidden offshore assets.

Birkenfeld waived a reading of the indictment in the court Thursday and then began to go over a seven-page statement of facts with U.S. District Judge William Zloch. Sentencing was set for Aug. 13.

In a seven-page statement of facts, Birkenfeld said he and other bankers helped wealthy clients set up nominee and sham entities to hold their assets in offshore financial centers, such as Switzerland, Panama, the British Virgin Islands, Hong Kong and Liechtenstein.

According to the statement, they then filed false and misleading U.S. tax forms and also helped clients place cash and valuables in Swiss safety deposit boxes, buy jewelry, artwork and luxury items, and use Swiss credit cards they thought could not be traced by U.S. authorities.

"On one occasion, at the request of a U.S. client, defendant Birkenfeld purchased diamonds using that U.S. client's Swiss bank account funds and smuggled the diamonds into the United States in a toothpaste tube," the statement of facts said.

A source close to the case said the unidentified billionaire in the indictment was property developer Igor Olenicoff, who pleaded guilty in December to filing a false 2002 tax return. Prosecutors say the billionaire evaded more than $7 million in income taxes.

The source, who asked not to be identified, said UBS was widely expected to strike a deal with the U.S. Department of Justice.

UBS declined to comment on Birkenfeld. But in a statement on Thursday it said it was working diligently with Swiss and U.S. government authorities and treating the probe into services it provided to U.S. clients "with the utmost seriousness."

Birkenfeld, who faces up to five years' imprisonment, was due to be sentenced on August 13 before U.S. District Judge William Zloch.

Birkenfeld's co-defendant, Swiss banker Mario Staggl, is believed to be in Liechtenstein.

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