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Suspect charged in LuxLeaks tax scandal

The suspected leaker of documents that revealed secret tax avoidance deals between Luxembourg and hundreds of multinational companies has been charged with theft, money-laundering and exposing trade secrets, prosecutors said Friday.

The suspect’s identity has not been revealed, but the Luxemburger Wort newspaper reported that he is a French former employee of auditing firm PwC Luxembourg.

The suspect, who lives in France, appeared before a judge in Luxembourg for several hours and was charged before being released, the newspaper said.

“A person has today been charged by an investigating magistrate in Luxembourg on counts of theft, breach of confidentiality, violation of trade secrets, money-laundering and fraudulent access to an automated data-processing system,” the prosecutors’ office said in a statement.

The so-called “LuxLeaks” scandal has exposed deals that saved some of the world’s largest companies, including Apple, IKEA and Pepsi, billions of dollars in taxes while Jean-Claude Juncker — the new president of the European Commission — was the country’s prime minister.

Juncker survived a vote of no confidence over the scandal late last month.

The suspect was charged following a complaint in June 2012 by PwC Luxembourg, which discovered documents had been stolen from the company following a report on tax avoidance by the television channel France 2 a month earlier.

According to PwC executives, the theft was committed in September 2010 by a former employee who had made copies of confidential data over two years without being spotted.

But the scandal did not blow up until last month — just days after Juncker came to office as European Commission chief — when dozens of newspapers pored over a new wave of 28,000 pages of documents obtained by the International Consortium of Investigative Journalists, revealing the full scale of the tax breaks won by 340 companies.

They detail “aggressive tax structures” brokered for major companies by accountants Ernst & Young, KPMG, PwC and Deloitte between 2003 and 2011.

– Disney, Skype dragged into scandal –

A fresh batch of documents released this week dragged in dozens of new companies, including Microsoft-owned Internet phone service Skype, as well as revealing that Disney paid just over 0.25 percent in tax in Luxembourg.

An international judicial investigation has been launched in France, according to a source close to the probe, leading to the indictment of the suspect on Thursday. The suspect was identified through an internal investigation at PwC.

Juncker, who is under pressure over Luxembourg’s tax policies during his 19 years in office, urged EU states and lawmakers on Friday to back tougher money-laundering laws.

“Transparency and good governance are pillars of our action” against corruption, Juncker wrote in reply to a letter from investigative journalists who pressed him on the issue.

“That is why I am calling for the quick adoption by the European Parliament and Council of the Commission proposal to strengthen the EU anti-money laundering laws.”

Juncker has suggested that the scandal has been used as a way to attack him in his first weeks in the job, saying that the timing of the leaks was “not a coincidence”.

In an interview published Wednesday he admitted he had been “weakened” by the scandal, but repeated his insistence that he was not personally involved in the deals for major corporations.

Juncker easily survived his confidence vote in the European Parliament, but when asked if his rival socialists might withdraw their confidence, leader Gianni Pittella gave the Commission chief six months to come up with proposals to settle the tax avoidance problem.

“The trust we’ve instilled in him is not a blank cheque. It is conditional on his actions,” Pittella told a press conference.

Commission spokesman Ricardo Cardoso said Juncker would not stand down.