June 3 (Bloomberg) -- Bradley Birkenfeld, the former UBS AG banker set to plead guilty for his role in a tax evasion scheme, has talked for more than a year with federal prosecutors as they probe whether the bank helped wealthy Americans conceal income.

Liechtenstein banker Mario Staggl and Birkenfeld, both 43, were charged in an indictment unsealed May 13 with helping billionaire real estate developer Igor Olenicoff evade U.S. taxes on $200 million in assets hidden in Liechtenstein and Switzerland. Birkenfeld, who worked in Zurich-based UBS's private banking unit, is to plead guilty next week, prosecutors said.

``Birkenfeld has been talking to the government for a period that well exceeds a year,'' Assistant U.S. Attorney Jeffrey Neiman said at Birkenfeld's bond hearing May 13 in Fort Lauderdale, Florida, federal court, according to a transcript. The former banker is cooperating in the prosecution of Staggl.

Olenicoff, chief executive officer of Olen Properties Corp., pleaded guilty Dec. 12 in Santa Ana, California, federal court to filing a false tax return. He was sentenced April 14 to two years probation and agreed to pay $52 million in back taxes, penalties and interest.

UBS, the world's biggest money manager for wealthy clients, has said it's cooperating with the probe of its services to U.S. clients from 2000 to 2007. Birkenfeld, who left the bank in 2006, later provided offshore banking services to U.S. clients through another Swiss company with offices in Miami, according to his indictment.

Two Years

The Washington-based law firm of Schertler & Onorato has represented Birkenfeld ``in this matter'' for two years, his attorney Danny Onorato said at the hearing.

``Things with Mr. Birkenfeld have progressed much faster than anyone ever expected, and he has been somewhat cooperative with the government,'' Assistant U.S. Attorney Jeffrey Kay said at the bond hearing, according to the court transcript.

Birkenfeld, a U.S. citizen who lived in Switzerland for 13 years, was arrested May 7, according to court records. Authorities detained him after he flew into Boston's Logan International Airport for a high school reunion, Neiman said. Onorato said he tried to work out an immunity agreement.

``We lost that battle,'' the defense lawyer said.

Birkenfeld ``knew coming into Logan last week that he was going to get arrested, and it wasn't any surprise to him,'' Neiman told U.S. Magistrate Judge Barry Seltzer at the May 13 hearing. Since arriving there, Birkenfeld ``reached an agreement in principle to cooperate'' with prosecutors, Onorato said.

Bank Employee

UBS has said a senior bank employee was ``briefly detained'' by U.S. authorities as a ``material witness.'' The Financial Times reported that the employee was Martin Liechti, head of UBS's international wealth management business for the Americas. He was detained by federal authorities in April, according to the bond hearing transcript.

At that hearing, Onorato said Birkenfeld ``knew that he provided Mr. Liechti's name'' to U.S. authorities, and ``he knew that there was a substantial chance that he would be caught up in the net.''

Last week, U.S. Attorney R. Alexander Acosta in Miami said Birkenfeld agreed to plead guilty on June 9 in Fort Lauderdale.

The judge ``will ask for a full confession,'' according to an entry on the court's docket.

Staggl, a co-founder of Liechtenstein-based New Haven Trust Co., allegedly ``devised, marketed and implemented tax evasion schemes'' for U.S. clients, prosecutors said in the indictment. Staggl didn't immediately return a call today seeking comment.

`Certainly Wrong'

Staggl attorney Andreas Schurti in Liechtenstein said it's ``certainly wrong'' for prosecutors to say his client helped wealthy Americans evade taxes.

``We are completely convinced that it is not correct,'' Schurti said in an interview. He added that Staggl, though considered a fugitive by U.S. authorities, goes to work every day at New Haven Trust in Liechtenstein.

``He is fed up with stories,'' the lawyer said. ``What Mr. Birkenfeld does is not that interesting.''

Onorato, Birkenfeld's lawyer, said at the May court hearing that his client is ``violating Swiss law by talking about his private clients,'' adding that ``the Swiss would prosecute him if he were to go back there.''

Neiman said the government is ``having difficulty getting records from Switzerland and identifying the true U.S. clients,'' as well as the amount of money they had offshore.

Flight Risk

At the bond hearing, Onorato argued that his client wasn't a flight risk, saying Birkenfeld wouldn't return to his $1 million house near the Matterhorn in Zermatt, Switzerland, or his apartment in Geneva, where he drove a BMW worth $50,000.

Seltzer set bail including a $2 million bond from Birkenfeld's father, a neurosurgeon, and a brother, a lawyer.

The judge also required Birkenfeld to wear an electronic monitoring device and remain at his brother's home in Boston under house arrest.

The indictment accused Birkenfeld and Staggl of helping Olenicoff use nominee entities and phony companies to hide assets. Birkenfeld and Staggl went to the U.S. to pitch tax evasion schemes, claiming ``Swiss and Liechtenstein bank secrecy was impenetrable,'' according to the indictment.

The two men allegedly told Olenicoff to destroy offshore banking records and use Swiss credit cards that they said wouldn't be discovered by U.S. authorities, according to the indictment.

`Sham Entities'

At the bond hearing, Neiman said Birkenfeld set up ``sham entities'' for a series of clients, including one who defrauded the U.S. of $7 million. Neiman said that was ``far and away his largest client'' in the U.S.

During a discussion of Birkenfeld's assets, Onorato said his client held shares valued at about $700,000 in a small stock in a U.S. account. Birkenfeld also held $1.5 million of the same stock in a Liechtenstein trust controlled by Staggl, the lawyer said.

``Birkenfeld has been directed to have no contact with Mr. Staggl,'' Onorato told the judge. ``He has not been in touch with him and he does not have access to those funds.''

Onorato declined to comment today.

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

To contact the reporters on this story: David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net; Carlyn Kolker in New York at ckolker@bloomberg.net.

Last Updated: June 3, 2008 15:27 EDT