Liechtenstein Tax Evasion Scandal Informant in German Investigation 'Fears' for his Life

The German man who sold officials data that has sparked the biggest tax evasion investigation in German history has requested another new identity out of fears he may be killed. The man is said to be concerned that powerful foreigners and despots who held accounts at the bank may retaliate.

The Castel of Vaduz in Liechtenstein

The Castel of Vaduz in Liechtenstein

Heinrich Kieber, the man who sold explosive customer data from LGT bank in Liechtenstein to Germany's foreign intelligence agency, the BND, is fearful for his life. Kieber, who has been bestowed a new identity as part of a witness protection program, complained in a letter to the BND about the fact that his name has been exposed and is demanding another change of identity.

Kieber first took up contact with the BND in January 2006 under the codename "Julia." And he eventally sold a DVD contaning the details of 2,000 client accounts worth more than €4 billion for a reported €4.2 million ($6.47 million.)

His latest letter was sent to the BND only a few days after prosecutors raided the home and offices of Deutsche Post Chairman Klaus Zumwinkel, who would step down from his post just days later. Kieber is said to be afraid of foreign potentates who belong to LGT's roster of customers. Members of the Saudi royal family are said to be among them as well as former Indonesian dictator Suharto, who died in January and who Indonesian justice authorities claimed illegally funneled more than a billion euros into foreign accounts.

Waves of Germans Turn Themselves In

In Germany, in the hope of receiving immunization from prosecution or bargaining for lower fines or sentences, a number of German LGT customers have already voluntarily turned themselves in to the tax authorities. By Friday, 134 of the 600 people whose information is said to be included in the data had turned themselves in. They include the owners of numerous companies in the textiles and cosmetics industries, and the highest reported case of tax evasion so far is reportedly €10 million.

In cases where people turn themselves in, they are forced to pay taxes on the earnings that were not claimed plus 6 percent interest. If, however, prosecutors decide to press charges, they could face stiff fines and prison sentences.

Currently, the German federal government in Berlin and leaders in the state of North-Rhine Westphalia are disputing whether or not tax evaders in the case who have turned themselves in can be subject to prosecution. German Finance Minister Peer Steinbrück of the Social Democrats called on tax evaders to turn themselves in, but his North-Rhine Westphalia colleague Helmut Linssens of the conservative Christian Democrats doesn't want them to be given immunity. It's Linssens' opinion that immunity only applies if a person turns himself before the start of proceedings or the moment they have been made public. Linnsen's tax investigators have been working on the LGT case since 2007.

However, tax authorities are not expected to search the homes of any more suspected tax evaders until after next week's Easter holiday. They are currently said to be investigating further material acquired from dubious sources. A career criminal is reportedly offering German officials 2,700 sets of data on German customers of the Liechtenstein bank Lichtensteinischen Landesbank, who apparently hid money there to avoid paying taxes in Germany.

German and other Western European countries have long been at odds with Liechtenstein and other countries with bank secrecy laws that empower tax evaders. Kieber also sold his DVD data to other countries, including the United States, making this a truly international scandal. In an editorial on its Web site last week, the US magazine the Atlantic asked if the case marked the "End of Secrecy?" The OECD, the magazine notes, has been pressing for tax havens to change their secrecy laws. Liechtenstein is one of three that hasn't. "Germany may simply have wanted to signal that it was prepared to go after tax evasion by any means necessary," the Atlantic writes. "Now that massive client files can be transferred to a DVD or USB drive with the click of a mouse, bank secrecy may no longer be the ironclad guarantee it once was."



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