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.