June 19 (Bloomberg) -- Former UBS AG banker Bradley Birkenfeld pleaded guilty in federal court to conspiracy, admitting he helped a California billionaire avoid U.S. taxes.

Birkenfeld, a U.S. citizen who worked at Zurich-based UBS's private banking unit from 2001 to 2006, told a judge he helped real estate developer Igor Olenicoff dodge income taxes on $200 million in assets hidden in Liechtenstein and Switzerland.

``I was employed by UBS and paid a large salary and incentivized to do this business,'' Birkenfeld, 43, said to U.S. District Judge William Zloch today in Fort Lauderdale, Florida, at his plea hearing. Birkenfeld faces a maximum sentence of five years in prison at his sentencing, set for Aug. 13.

Birkenfeld implicated other unidentified UBS bankers and wealthy clients in his plea, helping U.S. prosecutors as they deepen their probe of whether the bank assisted Americans in evading taxes. In a document accompanying his plea, Birkenfeld described the bank's systemic efforts to help U.S. clients conceal $20 billion in assets abroad. UBS collected about $200 million in annual revenue through those efforts, he said.

``His cooperation is anticipated to assist the government nationwide in its investigation,'' Kevin Downing, a federal prosecutor, said at today's hearing.

``He is going to tell the government everything he knew about UBS,'' Birkenfeld's attorney, Danny Onorato, said after the hearing.

Switzerland's Help Sought

Switzerland was asked by the U.S. government June 11 to cooperate with the probe, a spokesman for the Swiss Justice Office said June 16.

``UBS is working diligently with both Swiss and U.S. government authorities, consistent with Swiss law and the legal frameworks for intergovernmental cooperation and assistance,'' UBS spokesman Mark Arena said today in an e-mailed statement.

Onorato said today he expects the Justice Department's case ``will be much broader,'' declining to speculate on who else may be caught up in the investigation.

Birkenfeld had ``numerous'' U.S. clients, Onorato said, refusing to identify them. UBS bankers' salaries and bonuses were awarded based on their ability to bring in more wealthy clients, Onorato said.

``A number of those individuals have been reaching out to the authorities,'' Onorato said.

Birkenfeld's top client was Olenicoff, a billionaire and chief executive officer of Olen Properties Corp., Birkenfeld said in the document accompanying his plea.

False Tax Return

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

Birkenfeld and Mario Staggl, a Liechtenstein banker indicted along with Birkenfeld, helped Olenicoff set up accounts in the names of others and phony companies to hide assets, Birkenfeld admitted today. They 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 against the two men, unsealed on May 13.

Prosecutors have declared Staggl a fugitive.

Birkenfeld and other UBS bankers helped wealthy U.S. clients set up sham corporations that were often based in tax havens including Switzerland, Panama, the British Virgin Islands and Liechtenstein, Birkenfeld said in court papers made public today.

Conceal Assets

By helping U.S. clients conceal assets, UBS was breaking a so-called Qualified Intermediary agreement it signed with the Internal Revenue Service in 2001 in which the Swiss bank said it would report U.S. clients' income in offshore accounts, Birkenfeld said in the statement, signed June 10.

Birkenfeld has talked to prosecutors for more than a year, Assistant U.S. Attorney Jeffrey Neiman said at the ex-banker's May 13 bond hearing.

Birkenfeld resigned from UBS in 2006 because he had ``doubts'' about the company's practices, Birkenfeld said at the hearing today.

After working at UBS, Birkenfeld remained in Switzerland, where he owns a house in Zermatt, near the Matterhorn, according to court documents. Birkenfeld subsequently worked as a partner specializing in wealth management at Union Charter Ltd., from which he resigned on June 3.

Birkenfeld is single and has never married, he told Zloch.

One Prior Arrest

He had one prior arrest, Birkenfeld said in court today, for a drug offense in 1983 when he was in high school.

``It was dismissed, I believe,'' he told Zloch today. ``I don't recall.''

He was arrested in the UBS probe May 7 after he flew into Boston's Logan International Airport for a high school reunion, court records show. Birkenfeld was released on bond and was ordered to stay in Boston, where he lives with his brother, according to a transcript of a May 13 court hearing in Fort Lauderdale.

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

To contact the reporter on this story: Carlyn Kolker in federal court in Fort Lauderdale, Florida, at ckolker@bloomberg.net; David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net

Last Updated: June 19, 2008 14:47 EDT