"The Lowy family has done nothing improper," said Robert Bennett, a Washington lawyer who represents them. "We have not yet had the chance to thoroughly review the report, but any process that results in a report being issued before the subjects of the report have any meaningful opportunity to respond is grossly unfair, deeply flawed and unreliable."
•Harvey Greenfield and his son, Steven, are New York-based businessmen in the toy industry. Harvey Greenfield is CEO of Commonwealth Toy and Novelty, an international manufacturer of stuffed animals and dolls with offices in New York, Holland, Taiwan and Hong Kong. Steven Greenfield is the former president of the company, which has $35 million in annual sales, according to an Experian Business Report estimate.
According to the Senate panel, the Greenfields control the Maverick Foundation, an LGT-created entity that in 2001 held assets of roughly $2.2 million.
Internal LGT records obtained by the subcommittee show the Greenfields attended a March 2001 meeting with bank officials, including the brother of Liechtenstein's reigning prince, after a separate bank in Bermuda decided to end its own business with the family.
"The client is now on the search for a safe haven for his offshore assets," stated an LGT memo, which also said the Greenfields wanted to end ties with the Bermuda bank with "as few traces as possible."
LGT officials pitched the Greenfields about transferring $30 million to the Liechtenstein bank. It is unclear whether the transaction ever took place. But the Senate report said an attorney for the Greenfields told subcommittee investigators the family is negotiating with the IRS "over tax liability issues related to Liechtenstein."
The Greenfields did not respond to telephone messages left by USA TODAY.
•Until his death in 2006, James Albright Marsh was a successful construction contractor who lived in Florida with his six children. So successful that LGT helped him create four Liechtenstein foundations that by 2007 held assets "with a combined value of more than $49 million," the Senate panel reported.
Marsh and two of his sons, Kerry and Shannon, had a "strong measure of control" over the foundations, which, in turn were safeguarded by "strong secrecy protections," the report stated.
LGT's advice to client
In 2001, LGT agreed to participate in a new U.S. program that required overseas banks to report information about accounts that held U.S. securities. But the Lichtenstein bank did not report the Marsh-controlled foundations, subcommittee investigators found. Instead, the bank advised the family patriarch to divest U.S. securities from the foundations.
The IRS apparently learned of the Marsh accounts from documents provided by Kieber, the former LGT employee, the subcommittee reported. After the IRS began an investigation last year, the family paid about $2.9 million in back taxes and interest, the Senate report said.
The family requested a waiver of any penalties in part on grounds that Marsh's sons either did not know they were beneficiaries or didn't know the accounts had to be reported to the IRS.
Questioning that assertion, the subcommittee said LGT records show the sons "were aware of and had participated in the affairs of the LGT foundations."
The subcommittee listed Shannon Marsh as a witness for today's hearing, but he is not expected to appear. He did not respond to a USA TODAY message left at his home.
In a pre-hearing briefing, Levin and Sen. Norm Coleman, R-Minn., the subcommittee's ranking minority member, said the investigation findings underscore the need for their proposed legislation to strengthen reporting of foreign accounts held by Americans and penalize tax haven banks that impede U.S. tax enforcement.
"I would hope that this report would be a call to action," said Coleman.