German tax investigators launch mass raids on Credit Suisse

14th July 2010, Comments 0 comments

German prosecutors launched mass raids on Credit Suisse bank branches on Wednesday in a tax probe for any evidence that staff helped Germans hide money abroad, in a dispute angering Switzerland.

About 150 investigators descended on 13 branches of the Switzerland-based bank, the prosecutor's office in Dusseldorf, western Germany, said.

State attorney Johannes Mocken said the raids "targeted Credit Suisse staff suspected of having assisted tax fraud by clients."

The Swiss bank said in a statement that it was "cooperating with the relevant authorities" in Germany but added: "As it is an ongoing investigation, we cannot provide more information."

The searches at the 13 branches began at 0800 GMT, the prosecutor's office said.

Credit Suisse shares showed a loss of 1.58 percent to 44.98 Swiss francs in midday Zurich trading, while the SLI index on which they are listed was off by 0.14 percent overall.

In February, officials in the German state of North Rhine-Westphalia purchased a CD computer disc for a reported 2.5 million euros (3.2 million dollars) which contained information on about 1,100 wealthy Germans linked to the investigation.

They were urged to come forward of their own accord to avoid prosecution, and many have done so.

A spokesman for Duesseldorf prosecutors told AFP in March that "the Credit Suisse clients have investments in total of around 1.2 billion euros."

The amount of tax owed to the authorities was unclear, he added, but according to several sources they stood to recover up to 400 million euros.

Swiss authorities condemned the purchase, and the affair provoked diplomatic tension with Germany, which is determined to recover tax revenue from accounts in neighbouring countries where funds may have been deposited to evade tax.

The identity of the seller of the information has never been revealed, and the saga prompted a high-profile debate in Germany about paying for illicit data.

In 2008, a similar deal netted a long list of names and bank accounts in the principality of Liechtenstein which enabled officials to recover about 200 million euros in unpaid taxes and led to the arrest of the head of the logistics group Deutsche Post.

The saga put Liechtenstein and other tax havens including Switzerland in the firing line of international efforts against offshore banking havens and tax dodgers.

In late March, Germany and Switzerland reached agreement on the principle of a convention that would regulate taxation of individuals with financial interests in both countries.

Fellow Swiss banking giant UBS has also found itself under scrutiny for allegedly helping rich Americans hide money from the taxman.

In a state-brokered settlement in August 2009, UBS warded off a bruising US government lawsuit by agreeing to hand over secret details on about 4,450 clients and US taxpayers.

© 2010 AFP

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