LGT declined to testify. But the bank said it cooperated by assigning a senior executive to participate in a July 11 interview with Senate staffers and provide requested documents and answers "to the extent permitted under Liechtenstein laws."
On Thursday, Liechtenstein's government said in a statement that it has started investigating examples outlined at the Senate hearing "to determine whether Liechtenstein law was violated." The statement said government officials could not comment on specific allegations raised by the Senate report while the investigation proceeds.
"We do not want the Liechtenstein financial center to be perceived as a jurisdiction that actively assists bank clients circumvent their national tax obligations," Liechtenstein Prime Minister Otmar Hasler said.
19,000 undisclosed accounts
UBS has an estimated 19,000 U.S. clients with a combined $17.9 billion in accounts "that have not been disclosed to U.S. tax authorities," according to estimates given to the Senate panel by the bank and Bradley Birkenfeld, a former UBS banker.
He told the subcommittee roughly 80 UBS bankers traveled to the U.S. four to six times per year to pitch the bank's secretive services to well-heeled clients at such upscale events as Miami's annual Art Basel fair.
"It's really, "Where do the rich people hang out, go and talk to them,' " Birkenfeld told the Senate staffers.
Many U.S. clients were motivated by "tax evasion," Birkenfeld told Senate investigators, adding that both sides "clearly understood" no U.S. taxes would be paid on the overseas accounts.
The bankers used encrypted computers, devised codes for their clients' identities, told Customs agents the trips were for vacations, not business, and advised clients to place jewelry, paintings and other assets in Swiss safe deposit boxes, Birkenfeld testified in June, when he pleaded guilty to helping California billionaire Igor Olenicoff evade $7.2 million in U.S. taxes.
Separately, the Senate panel reported that in 2001 and 2002 LGT's trust office in Liechtenstein managed roughly $7 billion in assets and more than 3,000 offshore entities for clients, including an unknown number of Americans.
Former LGT computer technician Heinrich Kieber helped tax investigators around the world flesh out those statistics by handing over data on approximately 1,400 of the bank's clients. In February, German authorities used the information to open tax probes of several individuals and arrest at least one businessman.
Kieber is in hiding as Liechtenstein authorities seek him on charges of violating secrecy laws. He took part in a pre-hearing interview with Senate investigators — who didn't identify him by name in the report.
Subcommittee investigators also obtained more than 12,000 pages of internal LGT documents from the mid-1990s through 2002 regarding some of the bank's clients with connections to the United States.
Some of them "appear to have used the accounts to hide assets and dodge U.S. taxes," the subcommittee said. Case studies released by the panel include: