The Bahamas has once again been cited as a domicile used for "improper" financial transactions, this time by a US billionaire who pleaded guilty to hiding millions in Bahamian bank accounts.

Real estate mogul Igor Olenicoff, rated 286th in Forbes magazine's list of the 400 richest Americans, pleaded guilty in federal court last week to filing false tax returns. The Internal Revenue Service (IRS) claimed that between 1998 and 2004, Olenicoff hid more than $346 million in Bahamian offshore bank accounts.

Olenicoff is the founder and president of Newport Beach-based Olen Properties Corp., and owns more than 10,000 apartments and 33 residential communities in Las Vegas and Florida. He faces up to three years in prison, but legal pundits have said that, given the nature of the crime and terms of the plea agreement, he is unlikely to serve more than six months when he is sentenced next year in April. The Internal Revenue Service charged him with filing a 2002 tax statement denying he had offshore accounts. As part of his plea agreement, he is scheduled to pay US$52 million in back taxes. The deal with the government would appear to resolve a long-running dispute between Olenicoff and tax authorities. He is estimated to have a networth of about US$1.7 billion.

The Russian-born entrepreneur has claimed in the past that overseas entities, some with ties to former Russian president Boris Yeltsin, were behind many of his operations, with his own fortunes well below IRS estimates. He told Forbes magazine last year that Sovereign Bancorp Ltd, a Bahamian company formed in 1990 that controlled his overseas bank accounts, was set up by a Russian investment agency created by the former Russian leader Boris Yeltsin.
"I'm pleased with the outcome," Olenicoff said after the hearing. "I'm not happy about it."

The son of refugees from Russia, Olenicoff was born in Soviet-occupied Iran in 1942. According to a report in the Orange County Register, he immigrated to the United States at age 15 and graduated from USC. Although Olenicoff is a naturalized US citizen, his one moment of hesitation during the hearing came when the judge raised the prospect that the agreement could endanger his US residency status.

The case is Olenicoff's second brush with the IRS. His company Olen Properties paid US$272,024 to settle IRS claims for 1994 to 1996, after the agency originally sought US$148 million in back taxes and penalties from his company.

Courtesy of The Nassau Guardian

Chasing the dream to become a rising star

2008 Dancers Boom a roller coaster ride

Costing that click…