California real estate developer Igor M. Olenicoff filed suit Tuesday against UBS, claiming the Swiss banking giant deceived him

California real estate developer Igor M. Olenicoff filed suit Tuesday against UBS, claiming the Swiss banking giant deceived him about the legality of keeping $200 million in unreported offshore accounts; charged him millions in excessive fees; and after leading him astray, reported him as a "tax evader" to the Internal Revenue Service.In December, Olenicoff, a Forbes 400 member, pleaded guilty to a single federal tax felony and paid $52 million in back taxes, interest and civil fraud penalties. In his plea deal, he acknowledged that he had lied on his tax returns for 1998 through 2004 when he answered "no" to a question asking if he had ownership or authority over a financial account in a foreign country.In June, former UBS (nyse: UBS - news - people ) private banker Bradley Birkenfeld pleaded guilty to conspiring to helping the billionaire hide $200 million and evade $7 million in tax; he is cooperating with U.S. prosecutors and has made statements suggesting widespread wrongdoing at UBS.In a statement, Olenicoff described the suit, which accuses Birkenfeld, eight other former or current UBS bankers, and numerous additional defendants of fraud, as "the start of UBS and its partners in crime being called to account for what they did and answering to the victims of their shocking misconduct.” He is seeking $500 million in damages for actual losses and a "tarnished family and business name." A spokesman for UBS said Wednesday that the bank has reviewed the suit and "intends to vigorously defend itself in this litigation.'' UBS has admitted to compliance problems but has denied any wholesale fraud by the institution. It is now negotiating with the U.S. Department of Justice over a summons requiring it to turn over the names of the American owners of 19,000 "undeclared" UBS Swiss accounts. Swiss authorities insist such wholesale disclosure would violate the country's strict bank secrecy laws, which permit the turnover of information in cases of tax fraud, but not tax evasion.
William J. King, the Orange County attorney who brought the suit for Olenicoff, said it shows UBS “carried out an enormous fraud that ensnared thousands of innocent investors.” But Edward M. Robbins Jr., the billionaire's criminal attorney, insisted Olenicoff still accepts responsibility for his own misconduct. “He is not trying to weasel out of his guilty plea by blaming it on UBS,” Robbins saidOlenicoff says in his suit that he began moving both offshore and onshore funds to UBS in 2001 after being courted with promises of legal tax savings. Instead, he alleges, UBS provided "erroneous legal and tax advice" and concealed from him that he "owed taxes on his investments" to the IRS and "would face criminal investigation for the management structure of his account,” which included various trusts and companies set up in Liechtenstein and Denmark. According to the suit, when Birkenfeld was approached by the U.S. Department of Justice in 2004, he disclosed information about Olenicoff and other U.S. clients. In 2005, the suit adds, UBS, knowing Birkenfeld had already turned over information about the billionaire, also "reported Olenicoff to the IRS as a tax evader.”"Everybody was trying to avoid blame and they were making Mr. Olenicoff the sacrificial lamb,” King says. Adding insult to injury, the suit alleges Olenicoff's funds have been mishandled and tens of millions has gone missing. Birkenfeld left UBS and in 2005 persuaded Olenicoff to move his money to Neue Bank, also a defendant in the case. Last year, as part of his deal with prosecutors, Olenicoff agreed to bring all his funds back to the U.S. But shortly before the transfer was to take place, the suit alleges, $40 million was removed from his accounts.