Businessmen clam up at Senate tax-evasion hearing

— -- Two businessmen who last week failed to show up for a Senate subcommittee hearing on offshore tax evasion appeared before the panel Friday, but declined to answer questions about millions of dollars held in a bank famed for its secrecy.

Peter Lowy, part of a family that runs a $63 billion international portfolio of shopping malls, and Steven Greenfield, former president of a New York toy firm with an estimated $35 million in annual sales, invoked their Fifth Amendment right to avoid testifying.

They became the third and fourth witnesses to avoid Senate Permanent Subcommittee on Investigations questions about accounts at LGT, a Liechtenstein bank that the Senate panel says helped clients evade federal taxes. The panel has not made any allegations about the individuals it called to testify.

William Wu, a New York City man who sold his home to an entity he allegedly controlled through an entity created by LGT, the largest bank in the tiny European principality, similarly declined to answer subcommittee questions at the subcommittee's initial hearing last week.

Shannon Marsh, son of a successful Florida building contractor who held more than $49 million in four LGT-created foundations, also invoked his Fifth Amendment right to avoid testifying last week.

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The LGT accounts linked to the four men were not disclosed to the IRS, subcommittee evidence shows. Tax authorities in the U.S. and other countries only learned about the accounts — and roughly 1,400 others — when a former LGT employee provided internal bank records.

Those records, and similar evidence provided by a former employee of Swiss banking giant UBS, have sparked tax investigations in the U.S., Germany, Great Britain, Italy and other nations, and posed a significant challenge to the client secrecy for which LGT and UBS have long been renowned.

The IRS "is already going after" the four unwilling witnesses and other Americans who held unreported accounts at LGT or UBS, according to Elise Bean, the Senate panel's chief counsel and majority staff director.