Rich
Americans stash away $1.5 trillion in tax havens
Washington,
July 18: Wealthy Americans are hiding about USD 1.5 trillion
in overseas tax havens in a "deceptive" partnership
with top foreign banks such as UBS, resulting in USD 100 billion
in lost US tax revenue, a congressional probe was told on
Thursday.
The
hearing centered on a 115-page report following investigations
into alleged abuses by UBS in Switzerland and the smaller
LGT Bank in Liechtenstein amid a widening international investigation
into tax scandals involving the two banks.
"The
evidence we have been able to obtain breaks through some of
the wall of secrecy to show that these two banks have employed
banking practices that facilitate, and have resulted in, tax
evasion by US clients," said Democratic Senator Carl
Levin, who led the six-month US investigations.
The
offshore tax evasion problem faced by the United States is
of "staggering proportions," said Republican Senator
Norm Coleman, also a leading member in the Senate investigations
panel.
"These
tax havens hold an estimated USD 1.5 trillion in American
assets, resulting in lost taxes of roughly USD 100 billion,"
he said, describing some of the tax haven banking activities
as "a cloak-and-dagger deception in a James Bond movie."
The
OECD group of mostly industrialized economies estimates that
between USD 5-7 trillion are held in tax havens or banking
secrecy jurisdictions globally.
In
response to inquiries by the Senate probe panel, UBS, the
world's largest manager of private wealth, said 19,000 of
the 20,000 accounts in Switzerland for US clients were "undeclared"
in the range of nearly USD 18 billion.
US
authorities have initiated enforcement action against 100
US taxpayers in connection with accounts in the secretive
European principality Liechtenstein after a former LGT employee
provided tax authorities around the world with data on about
1,400 people with bank accounts.
The
ex-employee, who has gone into hiding, gave the US probe panel
12,000 pages of documents related to US clients as well as
some, according to Levin, "explosive" evidence.
Former
UBS banker Bradley Birkenfield had already pleaded guilty
to conspiring to help US clients evade millions of dollars
in taxes by hiding assets in Switzerland and Liechtenstein.
Another
UBS official was detained as a "material witness."
The enforcement actions appear to represent the first time
that the United States has criminally prosecuted a Swiss banker
for helping a US taxpayer evade US taxes.
"The
details of their tax evasion scheme are sordid enough,"
Levin said. The Senate panel had also obtained a document
showing that UBS provided its Swiss private bankers with training
on how to detect surveillance by US customs agents and law
enforcement officers while travelling to the United States,
he said.
UBS
had cooperated with the panel and one of its officials from
Switzerland flew down to testify at the hearing. LGT, which
is owned by the Prince of Liechtenstein Foundation, denied
the Senate's accusations and refused to appear at the hearing.
UBS
told the panel it was "changing its ways," Levin
said, citing a ban on travel by Swiss bankers to the United
States and a request to US clients to disclose their accounts
to the tax authorities.
Bureau
Report
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