In Europe, widening probe targets tax haven
Some 10 countries are investigating suspects, including the US, which estimates that it loses up to $100 billion a year in unpaid taxes.
London and Berlin
Nearly two decades after taking the helm of Deutsche Post, Klaus Zumwinkel had transformed Germany's national postal service into a global mail and logistics giant with annual revenues of €66 billion ($102 billion) – more than double those of FedEx. A director on the boards of Morgan Stanley, Deutsche Telekom, and Lufthansa, he was one of Germany's most prominent executives.Skip to next paragraph
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Then, on Feb. 14, he surrendered to police amid suspicion that he evaded €1 million in taxes. The next day, he resigned, becoming the first to fall in a massive probe that has broadened to nine other countries.
But even as Germany conducts its biggest tax-evasion probe ever, experts warn that technological advances and opaque banking practices are making it easier for individuals to stash trillions of dollars a year in havens such as Liechtenstein, Monaco, and Luxembourg.
"In this new, more globalized, integrated world, where you can go on to the Internet and open a secret offshore bank account in eight minutes, it's getting easier for a wider spectrum of the population to hide assets offshore and more difficult for tax authorities to follow the financial trail," says Grace Perez-Navarro, deputy director at the tax unit of the Organization for Economic Cooperation and Development (OECD) in Paris.
The OECD and the European Union (EU) have led the way in tackling tax evasion, and countries such as Ireland, Italy, and the Netherlands have all reported minor successes or launched new initiatives in recent months. The German probe, based on a list of 1,400 alleged tax cheats provided on CD by a paid informant, has yielded more than 300 suspects and $47 million in recovered taxes.
Liechtenstein, which has identified the informant as Heinrich Kieber, a former employee for a subsidiary of the royal family's bank, LGT, has contested the legality of the information. Germany's domestic intelligence services paid a reported $7.5 million to obtain and verify the lists, $6.2 million of which was pocketed by the informant.