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LGT Bank Fine Settlement Ends Tax Evasion Proceedings

by Ulrika Lomas, Tax-News.com, Brussels

20 December 2010


Closing a bitter chapter in its history, Liechtenstein’s LGT banking group has ended two-year criminal tax proceedings carried out by state prosecutors in Germany by paying a landmark fine totalling around EUR50m. Since February 2008, the bank has been under investigation on suspicion of having abetted tax evasion.

While emphasizing that the settlement in no way represents an admission of guilt by either the individuals concerned or by the bank itself, Christof Buri, LGT’s media spokesman, explained that the decision was made in order to avoid lengthy and burdensome litigation.

State prosecutors in Bochum investigating employees of the former LGT subsidiary, LGT Treuhand, agreed to suspend their tax investigations in return for payment of a global fine of EUR46.35m imposed on the banking group and for individual fines of around EUR3.65m.

The tax investigations were launched following the controversial decision to purchase stolen banking data from LGT Treuhand. Germany’s Federal Intelligence Service (der deutsche Bundesnachrichtendienst – BND) is reported to have paid in the region of EUR5m for the confidential information. Hundreds of individuals worldwide with accounts held in the bank were alleged to have evaded taxes, including Klaus Zumwinkel, former head of German mail giant Deutsche Post.

TAGS: individuals | tax | tax avoidance | banking | employees | Liechtenstein | Germany

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