May 30 (Bloomberg) -- A former UBS AG banker has agreed to plead guilty next month in a U.S. tax evasion case, signaling that he is cooperating with a Justice Department investigation of the biggest Swiss bank.

Bradley Birkenfeld, who worked in the firm's private banking division, scheduled a ``change of plea'' hearing for June 9 in federal court in Fort Lauderdale, Florida, according to court papers. The filing notes that the judge ``will ask for a full confession.''

Birkenfeld had pleaded not guilty earlier this month after he was indicted with Mario Staggl of Liechtenstein. Staggl is a fugitive, prosecutors have said.

The case is part of a growing U.S. investigation into whether UBS helped wealthy clients avoid paying taxes. The probe has added to the trouble swirling around the bank, which has also been hit hard by the subprime loan crisis and is seeking to raise 16 billion Swiss francs ($15.2 billion) from shareholders.

UBS fell 84 centimes, or 3.3 percent, to 24.94 francs at 4:50 p.m. in Zurich trading, extending losses over the past 12 months to 64 percent.

``The adverse publicity is badly timed as far as the UBS rights issue goes,'' Peter Thorne, an analyst at Helvea SA in London, said in a note. ``We continue to expect the shares to be weak.''

Customer Data

In agreeing to plead guilty, Birkenfeld likely will help prosecutors and identify UBS customers who shielded assets to escape paying income taxes, said Eileen O'Connor, former head of the Justice Department's tax division.

``He's decided to cooperate,'' said O'Connor, now a partner at the Pillsbury Winthrop Shaw Pittman law firm in Washington.

UBS said earlier this month that employees' access to client data is ``strictly managed according to the `need to know' principle.'' The company is cooperating with the investigation.

The indictment, unsealed May 13, alleges Birkenfeld and Staggl helped a billionaire real-estate mogul evade U.S. taxes on money stashed in bank accounts in Switzerland and Liechtenstein.

The two bankers were accused of attempting to sidestep rules in a U.S.-Switzerland tax treaty that requires information to be exchanged on some financial transactions. UBS in 2001 agreed to abide by those rules in exchange for ``qualified intermediary'' status, which requires its customers to fill out certain IRS forms.

Shell Corporations

The pair -- and others not identified by prosecutors -- allegedly falsified Swiss bank documents and IRS forms, and failed to comply with the terms of the ``qualified intermediary'' agreement, according to the indictment. They and other unidentified court employees traveled to the U.S. to pitch their schemes, prosecutors said.

Court papers accuse Staggl, Birkenfeld and unidentified others of setting up shell corporations to help U.S. bank account owners conceal their identities and advising U.S. clients to destroy offshore banking records that existed in the U.S. The two also helped clients prepare false and fraudulent tax returns, the government alleges.

UBS, in a statement, said it disclosed on May 6 that the U.S. Justice Department and Securities and Exchange Commission are investigating its conduct.

`Utmost Seriousness'

UBS is ``treating these investigations with the utmost seriousness and has committed substantial resources to cooperate with both investigations. UBS intends to appropriately and responsibly address and correct any issues raised in the investigation,'' the statement said.

Birkenfeld's attorney, Peter Raben, didn't return a call and an e-mail seeking comment. Alicia Valle, a spokeswoman for the Justice Department in Florida, declined to comment.

The billionaire beneficiary, unnamed in court papers except for his initials, has been identified as Igor Olenicoff, founder of Olen Properties Corp. He pleaded guilty in December to a charge of filing a false tax return and agreed to pay $52 million in back taxes, penalties and interest.

Olenicoff was ranked 236 on the Forbes Magazine list of the 400 wealthiest Americans this year with a net worth of $1.7 billion. He was sentenced to probation, 120 hours of community service and a $3,500 fine in April.

Birkenfeld, 43, and Staggl helped Olenicoff evade U.S. income taxes on about $200 million in assets, prosecutors said.

Secret Accounts

According to sentencing documents, Olenicoff maintained secret bank accounts at UBS and Neue Bank in Liechtenstein and transferred millions of dollars from accounts in London and the Bahamas to them.

Staggl recommended that Olenicoff set up entities in the British Virgin Islands, Panama or Gibraltar that ``would lead to another `safety break' in a tax and anonymity aspect,'' according to the indictment earlier this month. The pair also helped Olenicoff transfer ownership of a 147-foot yacht to a holding company in Gibraltar, the government alleged.

Birkenfeld worked at UBS from 2001 to 2006 in Switzerland, according to court papers. Staggl, also 43, is a co-founder of New Haven Trust Company Ltd. in Liechtenstein.

UBS is trying to curb money outflows after first-quarter net new money at the global wealth management and business banking unit slumped to 3.7 billion francs, compared with the 33.9 billion-franc average quarterly inflow of the past two years as Swiss customers pulled funds.

``I wouldn't expect any improvement in money inflows from international clients'' in the second quarter, said Madeleine Hofmann, a Zurich-based analyst at Julius Baer Holding AG. She forecasts zero inflows from Swiss clients.

The case is U.S. v. Bradley Birkenfeld and Mario Staggl, 08- 60099, U.S. District Court for the Southern District of Florida, Fort Lauderdale.

To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net; Robert Schmidt in Washington at Rschmidt5@bloomberg.net

Last Updated: May 30, 2008 11:16 EDT