Germany stunned by massive tax evasion probe

Feb 15 01:40 PM US/Eastern

Germany faced Friday what a police source described as its biggest tax evasion probe ever after "hundreds" of people, including prominent figures, were said to have hidden assets in Liechtenstein.
The Sueddeutsche Zeitung newspaper said in editions to appear Saturday that some 3.4 billion euros (4.9 billion dollars) was involved.

"In a large number of cases, key personalities from our country sought to avoid their duty of solidarity via taxation by practicing fiscal evasion to Liechtenstein," a finance ministry spokesman told a press conference here.

The Sueddeutsche Zeitung quoted judicial sources as saying officials were looking at around 700 suspects and had already prepared 900 search warrants.

On Thursday, a prosecutor in the western city of Bochum announced that Deutsche Post head Klaus Zumwinkel was suspected of involvement in a case of tax fraud and since then the affair has erupted.

Zumwinkel handed in his resignation on Friday.

German Chancellor Angela Merkel told reporters later: "This goes beyond anything I could have imagined.

"The situation is very difficult and depressing and the step that Zumwinkel has taken was unavoidable."

The finance ministry spokesman declined to comment on precisely who was under investigation, saying only that they were "known and unknown, especially people whose revenues are at the high end of the scale."

The prosecutor in charge of the probe spoke of "the financial deposits of several hundred" people, "in particular with Liechtenstein foundations, that seem to have been created to avoid taxes."

Liechtenstein is a small principality between Switzerland and Austria, widely regarded as a tax haven.

The daily Taggesspiegel said in its edition to appear Saturday that some 300 searches were already planned in what it quoted a police source as saying was set to become "the biggest fiscal investigation ever seen in Germany."

In some cases, the amounts in question could be "much bigger than in the case of Mr. Zumwinkel," which involved one million euros, the report added.

Germany, which puts a high value on social and financial probity, was shocked last year by scandals at engineering giant Siemens and the biggest European car maker, Volkswagen.

The first primarily involved slush funds used to obtain foreign contracts and provide support for a small German trade union, while the second involved funding favours, including sexual services to union officials in exchange for peaceful labour relations.

Zumwinkel handed in his resignation Friday after 18 years as head of Deutsche Post, which with its express delivery company DHL claims to be the world's leading logistics group.

The finance ministry spokesman welcomed Zumwinkel's decision, adding that he "assumed the resignation would be accepted" by the group's shareholders.

The state owns 30 percent of Deutsche Post.

A Deutsche Post statement said its executive committee would "propose to the supervisory board to accept the decision in the near future."

The probe involving Zumwinkel was the tip of the iceberg, according to sources quoted by the business daily Handelsblatt and television channel ZDF.

LGT Group, a bank in Liechtenstein, had become a focus of the probes, ZDF reported.

A spokesman for the bank said in a statement sent to AFP that "we have taken note of the extensive media coverage. The LGT-Treuhand bank, which has its headquarters in Vaduz, is in the process of verification."

The bank's Internet site describes it as "The Wealth and Asset Management Group of the Princely House of Liechtenstein."

Handelsblatt quoted an unidentified investigator as alleging that foundations were created to assist tax evasion.

"We have taken the bank apart," the investigator was quoted as saying.

A visit by Liechtenstein Prime Minister Otmar Hasler to Germany was scheduled next week and the tax probe "could be a topic of talks" with Merkel, her spokesman said.

http://www.breitbart.com/article.php?id=080215184029.82k4b4hw&show_article=1&catnum=4

One of the biggest Tax Fraud Case in Germany, Austria as others were more than 1.000 LGT Costumers may involved and will not included only Bank Managers as also "Promis" and others.

With opening of "Stiftungen" (what in fact is not very difficult even and if you have some bucks and you can included all your Family Members)and were in fact the Tax Payment to the Liechtenstein Government is very small this costumers transfer Millions of EURO to the Bank.
Ex German Postbank Mananger was the first one by following more in the next days.

Any members/visitor may have an account at LGT may contact "today" their Account Booker and not waiting until next week.

Thomas

The German government bought the information for 5 M Euro on the gray market, which puts the eyes also on the fact of an exchange of information of tax evasion data with other countries and the reward handling.

Interesting is also how different jurisdictions would or could use such information in a court of law. This information was bought from a criminal who had stolen the data from the bank; that is the tenor.
E.g. in the US of America such information could not be used in court, differently in Germany.

I'm not so sure it can not be used in court in USA, since they also pay anyone legally who pinpoints a tax evader. It does however seem to be difficult to get paid because they only pay when they recover the outstanding taxes, which takes time.

However just to add to the story, the German IRS is raiding the private banks and there is a wave of self-turning in (which if properly done may allow the evader to circumvent jail time) running.

Its a major hit against the Lichtenstein system, however I believe they will survive it.

Wall Street Journal says:
Heinrich Kieber, a former employee of Liechtenstein's largest bank, LGT Group, has offered confidential client data to tax authorities on several continents over the past 18 months, including the U.S., according to a person familiar with the matter.

Question is who has bought from that convicted felon beside the German's

German IRS is currently exchanging all the Lichtenstein data with its IRS Exchange partners, meaning all EU country IRS, Australia and USA

In addition it seems Vontobel bank is the second leak in the Lichtenstein affair.

hum well , now the liestenstein will be even more safe than it was because they will do all what is necessary to avoid this now...as it is their only way to survive...being only a banking country