German prosecutors leading one of the country's biggest tax-evasion probes said they had widened their investigation to a second bank in Liechtenstein as momentum to crack down on tax dodging grows.Investigators have so far searched the properties of about 150 suspected tax dodgers in a nationwide trawl to prove that up to 1,000 millionaires hid there money in Liechtenstein.
So far, the focus of the probe has been on LGT, a bank owned by Liechtenstein's royal family, a source with direct knowledge of the situation said. Germany has said it paid an informant for bank details of suspected tax evaders. LGT has said only that secret client information was stolen.
On Tuesday, prosecutors confirmed they now have a second bank in their sights.
Shares in Switzerland's Vontobel dropped after a newspaper said the Liechtenstein unit of the Swiss private bank was the unnamed target. Vontobel and prosecutors declined to comment.
Prosecutors in Germany have been investigating tax evasion scams mainly involving the misuse of foundations set up in Liechtenstein, the source told Reuters.
Such foundations were popular because it was impossible to prove who the ultimate beneficiary of the foundation's income was, the source explained.
A German tax evader could, for example, direct income earned either in Germany or abroad into a Liechtenstein foundation. This would ultimately find its way into his pocket without the German tax authorities' knowledge.
Prosecutors said on Tuesday that the foundations they were probing held far more than €200 million ($296.4 million) and that “immense” sums of tax revenue had been dodged.
Ninety-one people had already admitted their role and coughed up nearly €28 million towards their back taxes. Another 72 people had turned themselves in to tax authorities.
The tax-dodge probe has already forced the resignation of one of Germany's best-known business figures - Deutsche Post Chief Executive Klaus Zumwinkel. He was taken away from his home by investigators earlier this month, in a dramatic scene televised throughout Germany.
The German investigation is now snowballing into an international effort to crack down on tax evasion.
Liechtenstein is known as a popular tax hideout and is one of only three tax havens to be blacklisted by the OECD rich nations club.
Should the tax probe extend its tentacles to Switzerland, where foreigners have parked more of their money than at any other offshore location in the world, the implications would be far bigger.
Other countries including Britain and the Netherlands have already joined Germany to hunt down tax cheats with money stashed in Liechtenstein.
Britain's tax agency said it had followed Germany's lead and paid an informant to get hold of secret data on British citizens with accounts in the Alpine tax haven.
The Dutch government said citizens who evade tax by putting their money in Liechtenstein should turn themselves in.
Late last year, however, the state prosecutors in Bochum - one of Germany's most successful in pursuing white-collar criminals - were given information naming the beneficiaries. (Reuters)