Liechtenstein Man in UBS Case Had Clients in Libya, U.K. Probes

By Ryan J. Donmoyer and David Voreacos

July 7 (Bloomberg) -- Mario Staggl, a Liechtenstein investment adviser indicted in a tax-evasion probe of UBS AG, has for years helped scandal-tainted clients manage money stashed around the world.

Staggl told German prosecutors he set up companies for a consultant in South Africa who later pleaded guilty to trying to help Libya obtain nuclear bomb-making equipment, and provided similar services to an engineer being tried in Germany on related charges. He helped manage offshore assets for the family of a London politician accused by U.K. authorities of hiding money to avoid $80 million in penalties, U.S. records show.

``He appears to help people move money and conceal the ownership, source or location of it,'' said Gregory Baldwin, a former Miami federal prosecutor, after reviewing Staggl's record.

U.S. federal prosecutors in May charged that Staggl and former UBS banker Bradley Birkenfeld helped California billionaire Igor Olenicoff and other clients evade taxes. Olenicoff pleaded guilty to filing a false tax return. Birkenfeld pleaded guilty last month, saying UBS helped U.S. customers hide $20 billion.

After Staggl missed a May court appearance in Fort Lauderdale, Florida, U.S. authorities declared him a fugitive. Staggl, 43, didn't respond to calls, e-mails, and a visit to his two-story home or office in the shadow of the Alps. He continues to work openly at the red-brick headquarters of New Haven Trust Co. in Schaan, Liechtenstein, a 62-square-mile principality famous for bank secrecy.

Smoke, No Fire

``Usually where there's smoke, there's fire,'' said Staggl's lawyer, Andreas Schurti. ``Not here. We have a lot of smoke but no fire.''

In a 2005 interview with German prosecutors in a Liechtenstein court, Staggl said he had 150 to 200 clients and held executive positions in 200 companies established for customers in tax havens such as Liechtenstein and the British Virgin Islands.

German authorities were questioning Staggl about his connections with two men who were later accused of trying to arrange shipments of uranium-enrichment equipment to Libya. Both were allegedly part of a black market in atom-bomb technology headed by scientist Abdul Qadeer Khan, the so-called father of Pakistan's nuclear bomb.

One Staggl client, Gotthard Lerch, is fighting charges in a German court for alleged arms and export violations. Staggl told the Germans he managed seven offshore companies for Lerch, according to a court summary of the interview. Swiss corporation records listed Staggl as a director of Lerch's consulting firm.

Uranium Enrichment

Staggl said he also managed assets for Gerhard Wisser, a friend of Lerch's who pleaded guilty last year in South Africa to helping Khan's network procure equipment needed to make weapons-grade uranium.

Wisser was considering a divorce and ``wanted to protect himself from an asset point of view,'' Staggl told German prosecutors. Wisser was given an 18-year jail sentence, suspended on the condition that he cooperates with investigators, and forfeited $5 million of alleged criminal gains.

Staggl also helped manage a British Virgin Islands company that held assets for the family of Dame Shirley Porter, daughter of Tesco Plc supermarket founder Jack Cohen, according to U.S. Securities and Exchange Commission filings.

Labour Renters Replaced

Porter, now 77, was accused of trying to strengthen the Conservative Party's electoral fortunes in the 1980s by selling more than 600 public housing units, replacing Labour Party- leaning renters with Tory-friendly homeowners. At the time, she headed the city council in Westminster, a section of London that includes Westminster Abbey and Buckingham Palace.

Porter, who said the council's actions were within its authority, was ordered to repay Westminster's losses from the ``homes for votes'' incident. With interest, Porter's payment grew by 2004 to 44 million pounds, or $80 million under exchange rates at the time.

After Britain's House of Lords in December 2001 upheld the penalties, Porter said she had only 300,000 pounds and couldn't pay.

British authorities searched for assets and found that she had ``transferred the majority of her remaining assets to her husband and/or offshore trusts by the late 1990s,'' according to a 2007 government auditor's report.

Zollikon Investments

Staggl was a director at Zollikon Investments SA, in Tortola, British Virgin Islands, which held Porter family assets during the British proceedings, according to SEC filings. Zollikon controlled notes issued to Porter's husband in connection with a $12 million loan to Telos Corp., an Ashburn, Virginia-based defense contractor. Porter's son, John Porter, bought a controlling interest in Telos in 1993 with money provided by his parents, filings show.

Zollikon received quarterly interest payments from Telos on the notes, and Staggl signed papers for a refinancing of Telos debt that transferred $1 million to Zollikon. U.K. Land Registry records show Zollikon also paid $2.7 million for Shirley Porter's London flat.

In April 2004, Porter settled the Westminster dispute for about $22 million.

``Everybody knew she wasn't telling the truth -- now we know how she hid the money, and the sort of people she used to help her,'' said Paul Dimoldenberg, a Labour Party member of the Westminster council.

Porter didn't respond to calls, a letter and visits to her London apartment. John Porter said in an e-mail that he had never ``met or dealt with Mr. Staggl in any way.''

To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.netDavid Voreacos in Newark, New Jersey at dvoreacos@bloomberg.net