California businessman Peter Lowy's name was on a list of secret account holders at LGT bank. Lowy's attorney says his client has done nothing wrong.
(ABC News Photo Illustration)
LGT Bank says that while the Royal Family does own the bank it does not "operate" the bank. While LGT did decline to have officials testify before the Senate committee, they say they did provide a "compliance" officer who answered questions from Senate staffers for nearly ten hours last Friday. (click here to read the full statement from LGT Bank)
Also called to testify tomorrow are current and former officials of the giant Swiss bank UBS, including the head of the private wealth management Americas office, Martin Liechti, who was briefly detained by US authorities in Miami in May.
In court documents, federal prosecutors say UBS bankers helped set up many of the secret accounts in Liechtenstein and, overall, hid as much $20 billion belonging to US citizens.
"Sums are enormous and UBS appears to have been particularly aggressive in the way they marketed their activities in the US and elsewhere," said Christensen. "So UBS is extremely vulnerable to losing their license in the US."
One UBS banker, Bradley Birkenfeld, pleaded guilty last month and admitted to smuggling cash and diamonds for Americans trying to hide their wealth from the IRS.
In federal court documents obtained by ABC News, federal prosecutors allege that Birkenfeld's bank trained bankers traveling to the US in "techniques to avoid detection" by law enforcement authorities, "including training bankers to falsely state on customs forms that they were traveling into the United States for pleasure and not business".
Prosecutors say part of the Swiss bank scam was for the bank managers to have a third party who would set up sham entities for the US clients in tax havens, such as Panama or the British Virgin Islands, and pose as the owners of the entities.
"By concealing the US clients' ownership and control in the assets held offshore," the prosecutors say the Swiss bank and its managers "defrauded the IRS and evaded United States income taxes." (click here to read more of the court documents)
"The Americans were probably very shocked when their information wound up in the hands of the Internal Revenue Service," said Blum.
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