Steven Michael Rubinstein, the Art Basel-going yacht builder's accountant from Boca Raton who last week became first American prosecuted in a sweeping probe of tax shelters since the Swiss government ordered the bank to hand over the names of some 300 of its clients to the IRS, was released today on $12 million bail, the latest development in the intensifying probe of tax shelters. But not everyone involved in the investigation of what UBS itself called a "scheme to defraud the American government" is enjoying freedom of movement: also today the Wall Street Journal reports the bank has barred its "client facing" bankers from traveling overseas -- a move "aimed at avoiding further trouble" of the sort UBS bankers like Brad Birkenfeld flirted in the good old days before the crackdown:

Brad Birkenfeld was a frequent trans-­Atlantic flier. He lived and worked in Switzerland, dividing his time between an apartment in Geneva and a house in Zermatt, an Alpine village at the base of the Matterhorn. But his biggest client was in California, and however grueling the trip through nine time zones was, it was worth it...He was willing to go the extra mile for his clients, so he didn't blink when one of them asked him to do something that was blatantly illegal by any country's standard: Buy diamonds with secret Swiss funds and bring them into the U.S. undeclared and undetected.To get them into the country, Birkenfeld had only one option. He had to smuggle them in...So Brad Birkenfeld, a banker at one of the most prestigious institutions in global finance, began jamming his clients' loose diamonds into a tube of toothpaste.

The crackdown is leaving some stateside clients -- no doubt further panicked over not being able to see their private bankers in private -- alarmed, says another Journal story today:

Lawyers say they have been flooded by frantic calls from wealthy clients wondering whether to turn themselves in -- and, if so, how. "One woman was very scared. She was in tears," says Bryan Skarlatos, a lawyer at Kostelanetz & Fink in New York and chairman of the American Bar Association tax section's committee on civil and criminal tax penalties. On the ride back to New York from a tax conference in Galloway, N.J., last Friday, Mr. Skarlatos received four calls from worried clients. Some people have "many millions of dollars" stashed abroad, he says, and "are having a hard time deciding" what to do about the IRS program, which he describes as "the classic carrot-and-stick approach."

The "carrot" is a big break the IRS is offering on the usual penalties to Swiss bank account holders who volunteer to file amended returns and pay up within the next six months. The deal isn't an option for people under investigation for criminal tax evasion charges like Rubinstein, and presumably most of the other 300 names on the bank's most wanted list.

Some wealthy clients are fighting back, suing UBS for violating secrecy laws in Switzerland, where the bank is about as popular as AIG is here following a $60 billion national bailout.

In fact the probe owes a debt to another sold-out client, Orange County, Calif. billionaire Igor Olenicoff, the owner of the toothpaste-caked diamonds, who sued the bank for $500 million last year alleging a massive fraud and naming 28 UBS employees after pleading guilty to tax evasion. Shortly after Olenicoff filed suit, Birkenfeld pleaded guilty in the conspiracy and began cooperating in the investigation, which revealed that the bank had been conspiring with private bankers in Liechtenstein to move money around accounts in other countries less prone to cooperating with international regulatory authorities. But that game also appears to be ending, according to a report released yesterday by the Organization for Economic Cooperation Development on compliance with tax investigations: the last four countries "blacklisted" for their shoddy efforts to cooperate with financial investigations -- Costa Rica, Malaysia (Labuan), Philippines and Uruguay -- were moved to the "gray" list.