[taxabletalk] Russ: Blackmail and Tax Evasion from Europe

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Posted by Russ:
Blackmail and Tax Evasion from Europe
http://www.taxabletalk.com/posts/1232940032.shtml


   Liechtensteinische Landesbank AG (LLB) is the oldest bank in the
   principality of Liechtenstein. It's also very much involved in the
   current European tax evasion scandal centered around Germany. Two
   related stories emerged this past week.
   First, [1]a German court has convicted three men of attempting to
   blackmail LLB. The ringleader, identified only as Michael F., obtained
   2,325 LLB statements of German clients. Given the high German tax
   rates many citizens used banks in Liechtenstein as a tax haven for
   their money. Michael F. decided to engage in a little blackmail; he
   demanded EUR13 million in exchange for returning the data. Given the
   principality's rules on informing other countries of bank account
   holders (i.e., don't ask and don't tell), this might have been a wise
   strategy...until he got caught.
   Blackmail is just as illegal in Germany as in the United States.
   Presiding Judge Dirk Fischer in Rostock, Germany delivered the
   verdict: "Michael F. claimed that he was only proposing a deal to the
   bank and didnât coerce anybody. Well, we see that quite differently."
   Michael will spend 63 months in a German prison; his two accomplices
   received suspended sentences. Attorneys for the convicted men promise
   appeals. Prosecutors will also appeal the sentences as they felt they
   weren't harsh enough.
   Meanwhile, Klaus Zumwinkel, the former CEO of Deutche Post AG,
   confessed in Bouchum, Germany to tax evasion. He sequestered
   EUR970,000 through another Liechtenstein bank (LGT Group). I doubt the
   Federal Central Tax Office (BZSt, the German equivalent of the IRS) is
   pleased and I suspect Mr. Zumwinkel will have to make restitution, pay
   a fine, and might end up in prison.
   We've [2]reported on the scandal before. A few Americans may have used
   Liechtenstein banks, too. If you reported your income, fine. Having a
   foreign bank account isn't illegal (though you must report it). If you
   haven't, it's time to seek legal advice. Whether in Germany or in the
   United States, tax evasion isn't a good idea.

References

   1. http://www.bloomberg.com/apps/news?pid=20601100&sid=aGvEifcjeIVM&refer=germany
   2. http://www.taxabletalk.com/posts/chain_1203620078.shtml