May 31 (Bloomberg) -- Real estate billionaire Igor Olenicoff used several offshore banks to hide money from U.S. tax authorities, according to his guilty plea and court records linking him to an indicted former private banker at UBS AG.

Olenicoff, chief executive officer and founder of Newport Beach, California-based Olen Properties Corp., lied to U.S. tax authorities about offshore accounts with Barclays Bank in the Bahamas, Salomon Smith Barney in London, UBS in Switzerland, and Neue Bank in Liechtenstein, according to papers filed with his Dec. 12 guilty plea in federal court in Santa Ana, California.

Olenicoff admitted failing to disclose offshore assets on his 2002 tax return and lying about overseas holdings from 1998 to 2004. He began moving money overseas at least 16 years ago, according to his plea agreement. Olenicoff said he was acting on the advice of bankers and accountants who told him to continue the practice.

``To make a long story short, it was bad advice; me not thinking about it,'' Olenicoff told U.S. District Judge Cormac Carney, according to a transcript of his April 14 sentencing. ``I'm sorry. The intent was never to defraud the federal government.'' Olenicoff was sentenced to two years of probation.

Former UBS banker Bradley Birkenfeld, a U.S. citizen, and Mario Staggl, a resident of Liechtenstein, were indicted April 10 on charges of helping Olenicoff evade taxes on $200 million in assets. Birkenfeld and Staggl helped him hide assets in accounts in Switzerland and Liechtenstein, U.S. prosecutors alleged. Birkenfeld agreed to plead guilty June 9 in federal court in Fort Lauderdale, Florida, according to court records.

Wealthy Residents

The Birkenfeld indictment, along with Olenicoff's plea documents and court statements, may help illuminate how wealthy U.S. residents move money around the world to avoid paying taxes. Zurich-based UBS, the world's biggest money manager for wealthy individuals, has said it's cooperating with the U.S. Justice Department investigation.

Olenicoff, who lives in Laguna Beach, California, was ranked 236 on the Forbes Magazine list of the 400 wealthiest Americans this year with a net worth of $1.7 billion. He agreed to pay $52 million in back taxes, penalties and interest. In addition to probation, Carney fined Olenicoff $3,500 and sentenced him to 120 hours of community service.

In his plea agreement, Olenicoff admitted that he moved money using the names of several corporate entities, including Sovereign Bancorp Ltd., National Depository Corp., Guardian Guarantee Co. and Swiss Finance Corp.

Moved $61 Million

Olenicoff said he moved $61 million in 1992 to a Bank of Montreal account in Canada, transferred $40 million from Salomon Smith Barney to Barclays in 1998, and shifted $118 million from Salomon Smith Barney to Barclays in 2001. He also admitted moving $89 million from Barclays to UBS in 2001.

Prosecutors alleged in the indictment of Birkenfeld and Staggl that they helped wealthy U.S. clients evade income taxes by ``claiming that Swiss and Liechtenstein bank secrecy was impenetrable.'' Prosecutors said the two men helped Olenicoff evade taxes on $200 million in assets.

Birkenfeld and Staggl helped Olenicoff set up nominee accounts in Liechtenstein and recommended that he transfer ownership of a 147-foot yacht to a holding company in Gibraltar.

At his sentencing hearing, Olenicoff said he began moving money offshore after he started out in business as ``a young man with virtually no assets.''

Founded in 1973

Olen Properties was founded in 1973 and owns commercial and residential properties in Florida, Las Vegas, Arizona and California, according to the company Web site.

Lloyds Bank of California, which was later purchased by Sanwa Bank, extended a $44 million line of credit, Olenicoff said. The bank later suggested that he create a company in the Cayman Islands to receive stock from his real-estate business, Olenicoff told the judge.

``This goes back many, many years ago when I clearly got some bad advice and pressure from a lender, to be specific, who needed security and wanted the ownership of the company to be offshore,'' Olenicoff said at the hearing.

A real-estate specific accounting firm later advised him to keep his stock holdings offshore, Olenicoff said.

``That was the bad advice,'' he said. The accountants advised him to ``keep your stock offshore because if you bring it back, there is a lot of gain in the stock that has grown up in five years and make that your estate plan.''

Olenicoff Lawyer

Olenicoff lawyer Edward Robbins didn't return a message seeking comment.

The judge praised Olenicoff's ``intelligence, his amazing talent'' and his ``wonderful work'' on behalf of disabled children in Eastern Europe.

``When I find out that people of your stature and standing, you know, lie on your tax returns, it frustrates me; saddens me,'' Carney said.

Simon Eaton, a spokesman at Barclays, didn't immediately return a message seeking comment. Alexander Samuelson, a spokesman for Citigroup Inc., the parent of Salomon Smith Barney, declined to comment. A representative of Mitsubishi UFJ Financial Group Inc., which took over Sanwa Bank Ltd., couldn't be reached for comment in a call made after business hours.

The case is U.S. v. Olenicoff, 07-cr-00227, U.S. District Court, Central District of California (Santa Ana).

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

Last Updated: May 31, 2008 00:01 EDT