UBS Parties On in Face of Federal Investigation

December 4, 2008— -- Despite a federal criminal investigation of its alleged role in helping wealthy Americans hide billions of dollars from the IRS, Swiss bank UBS returned this year as the main sponsor of one of the great gatherings of the super-rich, the Art Basel exhibition in Miami.

"We are very happy about their support," said Art Basel Communications Manager Maike Cruse. "They have been very faithful partners to us," she said.

At the festival's swanky grand opening, champagne flowed and celebrities mingled in the Miami Beach convention hall packed with multi-million dollar works of art .

"This is the Dom Perignon of the art world," said Art Basel spokesperson Bob Goodman. Art dealers and collectors were closely watching prices to see if bad economic times would take their toll on a gathering some claimed was "recession proof." A painting by the Belgian surrealist Rene Magritte was on sale for $11.5 million.

The show opened one month after a federal grand jury in Florida indicted the head of UBS's worldwide wealth management business, Raoul Weil, for his alleged role in helping thousands of Americans hide their money in secret accounts set up by UBS. Weil, based at UBS headquarters in Zurich, has relinqueshed his role at UBS.

According to the indictment, UBS bankers "solicited new business from existing and prospective United States clients at Art Basel Miami Beach."

"They sent their salespeople here. They have encrypted computers. They smuggled assets out of the country to help those people conceal what they should have paid the IRS," said Jack Blum, a Washington tax lawyer and consultant to the IRS. "So the question is, why should a bank like that be allowed to continue in business?" said Blum of UBS.

The senior UBS executive in Miami Beach declined to talk with ABC News about the criminal investigation of his bank. "I'm here to talk about art, not about investigations, thank you very much," said James price, co-head of the UBS Wealth Management Advisor Group in the U.S.