US district judge Andrew Guilford in Santa Ana, California has issued a “tentative” opinion rejecting Olenicoff’s lawsuit against UBS. Olenicoff claimed UBS committed fraud by not telling him he owed US taxes. He also said the bank traded excessively in his accounts and engaged in racketeering. He sought as much as $1.7 billion in damages.

“Olenicoff cannot prove that UBS committed any wrongful act without running headlong into his own admission of criminal guilt,” Guilford wrote. “Olenicoff’s claim that he justifiably relied on UBS tax advice is entirely inconsistent with his plea agreement,” the judge was quoted as saying.

The case highlights the extent to which a bank can be held liable for the advice it gives clients and the fact that clients must obey national laws regardless of any such advice.

Olenicoff, who built his fortune as the chief executive officer of Newport Beach, California-based Olen Properties Corp, pleaded guilty in 2007 to filing a false tax return. He admitted he hid offshore accounts from the Internal Revenue Service for seven years. He was sentenced to two years’ probation and ordered to pay $52 million in back taxes, fines and penalties.

Olenicoff claimed UBS funnelled his money to risky accounts that were “churned” to his detriment. Guilford ruled that, because Olenicoff made a profit of $12 million, he has no damages.

UBS had urged the judge to dismiss the case.

“UBS did not tell Olenicoff to lie on his tax returns about having an interest in foreign accounts,” the bank said in an April court filing. “Olenicoff knowingly and willfully lied on his tax returns. Olenicoff’s felony conviction for subscribing to a false tax return is no one’s fault but his own.”